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At the end of 2019, Blue corporation made a $300,000 cash distribution to its sole shareholder, Rebecca.  Prior to the distribution, Blue Corporation had an E&P balance of $200,000.  Rebecca’s basis in her stock of Blue Corporation was $150,000 prior to the distribution.  What is Rebecca’s basis in her Blue Corporation stock after the distribution?   Question 10 options:   a)  $300,000.   b)  $250,000.   c)  $150,000.   d)  $50,000.   e)  $0.

At the end of 2019, Blue corporation made a $300,000 cash distribution to its sole shareholder, Rebecca.  Prior to the distribution, Blue Corporation had an E&P balance of $200,000.  Rebecca’s basis in her stock of Blue Corporation was $150,000 prior to the distribution.  What is Rebecca’s basis in her Blue Corporation stock after the distribution?   Question 10 options:   a)  $300,000.   b)  $250,000.   c)  $150,000.   d)  $50,000.   e)  $0.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of 2019, Blue corporation made a $300,000 cash distribution to its sole shareholder, Rebecca.  Prior to the distribution, Blue Corporation had an E&P balance of $200,000.  Rebecca’s basis in her stock of Blue Corporation was $150,000 prior to the distribution.  What is Rebecca’s basis in her Blue Corporation stock after the distribution?

 

Question 10 options:

 

a) 

$300,000.
 

b) 

$250,000.
 

c) 

$150,000.
 

d) 

$50,000.
 

e) 

$0.
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