When an S corporation shareholder sells her stock,she must first recognize ordinary gain to the extent of her share of the unrealized receivables and appreciation on inventory held by the S corporation,with the balance of the gain treated as capital gain.

Question

Quizplus · Accepted Answer

When an S corporation shareholder sells her stock, the gain is generally treated as a capital gain. Unrealized receivables and inventory appreciation are not separately recognized as ordinary income in this context.

When an S Corporation Shareholder Sells Her Stock,she Must First