During 2010,Lion Corporation Incurs the Following Transactions

question 36

Multiple Choice

During 2010,Lion Corporation incurs the following transactions. Lion maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder,Penny.As a result,Penny must recognize:

• A)Ordinary income of $103,000 and long-term capital gain of $5,000.
• B)Ordinary income of $103,000,long-term capital gain of $10,000,and $4,000 short-term capital loss.
• C)Ordinary income of $108,000.
• D)None of the above.

---

Definitions:

Societies

Groups of individuals living together in organized communities with shared laws, traditions, and values.

Happy And Prosperous

A state of being characterized by contentment, joy, and success in life's endeavors.

Free

Not under the control or in the power of another; able to act or be done as one wishes.

Construct An Argument

The process of logically assembling reasons, evidence, and facts to support a statement, proposition, or conclusion.