Kristine Owns All of the Stock of a C Corporation

question 158

Multiple Choice

Kristine owns all of the stock of a C corporation which owns the following assets:
* Potential § 1245 recapture of $45,000.
** Straight-line depreciation was used.
Her adjusted basis for her stock is $270,000. Calculate Kristine's recognized gain or loss and classify it as capital or ordinary if she sells her stock for $500,000.

• A)$230,000 ordinary income.
• B)$230,000 capital gain.
• C)$115,000 ordinary income and $115,000 capital gain.
• D)$110,000 ordinary income and $120,000 capital gain.
• E)None of the above.

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Definitions:

International Finance

The study of financial systems, currencies, and markets, and how they operate in the global context.

International Trade

The exchange of goods, services, and capital between countries, driven by comparative advantage and global demand.

Current Accounts Deficit

A measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports.

Current Account Deficit

An evaluation of a nation's trade balance when the cost of its imports surpasses the value of its exports in goods and services.