On January 3, Year 4, Taylor and Barr each owned 100 shares of the 200 issued shares of Lan stock. Taylor's basis in Lan shares on that date was $10,000. Taylor sold all of his Lan shares to Pike on January 31, Year 4, and Lan made a valid election to terminate its tax year. Taylor's share of ordinary income from Lan prior to the sale was $2,000. Lan made a cash distribution of $3,000 to Taylor on January 30, Year 4. What was Taylor's basis in Lan shares for determining gain or loss from the sale to Pike? Options: $0, $1700, $2500, $2672, $3150, $3750, $4700, $5000, $6140, $9000
On January 3, Year 4, Taylor and Barr each owned 100 shares of the 200 issued shares of Lan stock. Taylor's basis in Lan shares on that date was $10,000. Taylor sold all of his Lan shares to Pike on January 31, Year 4, and Lan made a valid election to terminate its tax year. Taylor's share of ordinary income from Lan prior to the sale was $2,000. Lan made a cash distribution of $3,000 to Taylor on January 30, Year 4. What was Taylor's basis in Lan shares for determining gain or loss from the sale to Pike? Options: $0, $1700, $2500, $2672, $3150, $3750, $4700, $5000, $6140, $9000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2.
Transcribed Image Text:On January 3, Year 4, Taylor and
Barr each owned 100 shares of
the 200 issued shares of Lan
stock. Taylor's basis in Lan shares
on that date was $10,000. Taylor
sold all of his Lan shares to Pike
on January 31, Year 4, and Lan
made a valid election to terminate
its tax year. Taylor's share of
ordinary income from Lan prior to
the sale was $2,000. Lan made a
cash distribution of $3,000 to
Taylor on January 30, Year 4.
What was Taylor's basis in Lan
shares for determining gain or
loss from the sale to Pike?
Options: $0, $1700, $2500, $2672,
$3150, $3750, $4700, $5000,
$6140, $9000
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