What is the amount of Mrs. C's basis in the stock after the distribution?

timer Asked: Jul 2nd, 2013

Question Description

I need help with a question. All explanations and answers will be used to help me learn.

Corporation M, a calendar year
corporation that began doing business on January 1, 20X1,

had accumulated earnings and profits of $30,000 as of January 1, 20X8. On July 2, 20X8, M

distributed $22,000 cash to Mrs.
C, M's sole shareholder. M had a $20,000 deficit in

earnings and profits for 20X8. Mrs. C had an adjusted basis of $14,000 in her stock before

the distribution. What is the amount of Mrs. C's basis in the stock after the distribution?

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