Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation. The Dried Fruit Corp. stock is owned one-third by Raisin and two- thirds by Prune. All shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's basis in his shares was $54,000 and Prune's basis in her shares was $18,000. During the current year, Dried Fruit Corp. earned $324,000 of net income from operations. Raisin's share was $108,000; Prune's share was $216,000. On July 1st, Dried Fruit Corp. distributed $144,000 to Raisin and $288,000 to Prune. How much gain does Raisin recognize as a result of this transaction? O $36,000 O $18,000 O $0 O $54,000
Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation. The Dried Fruit Corp. stock is owned one-third by Raisin and two- thirds by Prune. All shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's basis in his shares was $54,000 and Prune's basis in her shares was $18,000. During the current year, Dried Fruit Corp. earned $324,000 of net income from operations. Raisin's share was $108,000; Prune's share was $216,000. On July 1st, Dried Fruit Corp. distributed $144,000 to Raisin and $288,000 to Prune. How much gain does Raisin recognize as a result of this transaction? O $36,000 O $18,000 O $0 O $54,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dried Fruit Corp. has had a valid S Corp election in effect at all times since its
incorporation. The Dried Fruit Corp. stock is owned one-third by Raisin and two-
thirds by Prune. All shareholders are US resident citizen individuals. At the
beginning of the current year, Raisin's basis in his shares was $54,000 and Prune's
basis in her shares was $18,000. During the current year, Dried Fruit Corp.
earned $324,000 of net income from operations. Raisin's share was $108,000;
Prune's share was $216,000. On July 1st, Dried Fruit Corp. distributed $144,000
to Raisin and $288,000 to Prune. How much gain does Raisin recognize as a
result of this transaction?
O $36,000
$18,000
$0
O $54,000
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