Question:12 ABC, Inc. has been an S corporation since its inception. On July 15, 2016, ABC, Inc. distributed $50,000 to J. D. His basis in his ABC, Inc. stock on January 1, 2016, was $45,000. For 2016, J. D. was allocated $10,000 of ordinary income from ABC, Inc. and no separately stated items. How much capital gain does J. D. recognize related to ABC, Inc. in 2016? a. $60,000. b. $50,000. c. $20,000. d. $10,000. e. None of these.
Question:12 ABC, Inc. has been an S corporation since its inception. On July 15, 2016, ABC, Inc. distributed $50,000 to J. D. His basis in his ABC, Inc. stock on January 1, 2016, was $45,000. For 2016, J. D. was allocated $10,000 of ordinary income from ABC, Inc. and no separately stated items. How much capital gain does J. D. recognize related to ABC, Inc. in 2016? a. $60,000. b. $50,000. c. $20,000. d. $10,000. e. None of these.
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 68P
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Transcribed Image Text:Question:12
ABC, Inc. has been an S corporation since its inception. On July 15,
2016, ABC, Inc. distributed $50,000 to J. D. His basis in his ABC, Inc.
stock on January 1, 2016, was $45,000. For 2016, J. D. was allocated
$10,000 of ordinary income from ABC, Inc. and no separately stated
items.
How much capital gain does J. D. recognize related to ABC, Inc. in
2016?
a. $60,000.
b. $50,000.
c. $20,000.
d. $10,000.
e. None of these.
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