Assume that at the end of 2017,Clampett,Inc.(an S corporation) distributes property (fair market value of $40,000,basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000) .At the time of the distribution,Clampett,Inc.has no corporate E&P and J.D.has a basis of $50,000 in his Clampett,Inc.stock.What is J.D.'s stock basis after the distribution?
A) $45,000.
B) $50,000.
C) $85,000.
D) $90,000.
E) None of the choices are correct.
Correct Answer:
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