Challenging Business Problems with Detailed Answers
assume that at the end of 2019, clampett, inc. (an s corporation) distributes property (fair market value of $40,000, basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000). at the time of the distribution, clampett, inc., has no corporate earnings and profits and j.d. has a basis of $50,000 in his clampett, inc., stock. how much income does j.d. recognize as a result of the distribution?