Ask Question
11 December, 21:57

Clampett, Inc. has been an S corporation since its inception. On July 15, 2019, Clampett, Inc. distributed $40,500 to J. D. His basis in his Clampett, Inc. stock on January 1, 2019, was $35,000. For 2019, J. D. was allocated $12,000 of ordinary income from Clampett, Inc. and no separately stated items. How much capital gain does J. D. recognize related to Clampett, Inc. in 2019? a. $40,500. b. $12,000. c. None of the choices are correct. d. $52,500. e. $24,000.

+4
Answers (1)
  1. 12 December, 01:50
    0
    c. None of the choices are correct

    Explanation:

    Calculation of capital gain

    Basis of stock $35,000

    Allocated ordinary income $12,000

    Total basis $47,000

    Amount distributed $40,500

    Therefore, Since basis is more than distribution capital gain, The capital gain is $0.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Clampett, Inc. has been an S corporation since its inception. On July 15, 2019, Clampett, Inc. distributed $40,500 to J. D. His basis in ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers