Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

تمرين 46

Parker Company has earnings and profits of $8,000. It distributes capital gain property with a basis of $2,000 and FMV of $9,000 to Gertrude Parker, its sole shareholder. Gertrude has a basis of $10,000 in her stock. Which of the following statements is true with respect to this transaction? a. Gertrude will report dividend income of $2,000 and a capital gain of $7,000.
B) Gertrude will report dividend income of $8,000.
C) Gertrude will report dividend income of $8,000 and a nontaxable distribution of $1,000.
D) Gertrude will report dividend income of $9,000.