QUESTION 11 Brown and Johnella each own one-half (1/2) of the stock of Phillips Corporation, an S Corporation. Each shareholder has an Adjusted Basis in her stock of $100,000. Phillips Corporation has no Accumulated Earnings And Profits (E&P), Phillips Corporations Taxable income for the current year is $80,000 and distributes $50,000 to each shareholder. Brown's basis in her stock at the end of the year is $50,000. O True O False
QUESTION 11 Brown and Johnella each own one-half (1/2) of the stock of Phillips Corporation, an S Corporation. Each shareholder has an Adjusted Basis in her stock of $100,000. Phillips Corporation has no Accumulated Earnings And Profits (E&P), Phillips Corporations Taxable income for the current year is $80,000 and distributes $50,000 to each shareholder. Brown's basis in her stock at the end of the year is $50,000. O True O False
Chapter22: S Corporations
Section: Chapter Questions
Problem 6BCRQ
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Transcribed Image Text:QUESTION 11
Brown and Johnella each own one-half (1/2) of the stock of Phillips Corporation, an S Corporation. Each shareholder has an Adjusted Basis in her stock of
$100,000. Phillips Corporation has no Accumulated Earnings And Profits (E&P), Phillips Corporation's Taxable income for the current year is $80,000 and it
distributes $50,000 to each shareholder. Brown's basis in her stock at the end of the year is $50,000.
True
O False
QUESTION 12
Linda and Peppers each own a fifty percent (50%) interest in a business entity, Linda contributed $200,000 for her ownership interest and Peppers contributed
Land worth $200,000 (Adjusted Basis of $150,000) for her ownership interest. Several months after the formation of the entity, the Land contributed by Peppers
is sold by the business entity for $220,000. If the business entity is a Regular (C) Corporation, Peppers's share of the Recognized Gain from the sale of the Land
by the Regular (C) Corporation is $10,000
False
True
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