Ryan is the sole shareholder of Sweetwater Apartments, an S corporation in Sour Lake, Texas.At a time when his stock basis is $10,000, the corporation distributes appreciated property worth $100,000 (basis of $10,000).There is no built-in gain.Ryan's taxable gain is:

Question

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When an S corporation distributes appreciated property, the shareholder's taxable gain is equal to the difference between the fair market value of the property and the shareholder's stock basis. In this case, the fair market value of the property is $100,000 and Ryan's stock basis is $10,000, resulting in a taxable gain of $90,000.

Ryan Is the Sole Shareholder of Sweetwater Apartments, an S