Sally the sole shareholder of Yellow Corp. sold her stock to George on July 30 for $240,000. Sally’s basis in her shares at the beginning of the year was $200,000. Yellow had accumulated E&P of $145,000 coming into the year. It had $180,000 of current E&P for the year. It made a distribution to Sally of $475,000 on July 1 and distributed $200,000 to George on November 1. How did Sally treat the distribution? How did George treat the distribution? How much gain or loss did Sally recognize on her sale of stock to George.

Answer rating: 100% (QA)

Capital Gain arises when any asset like shares of stock a piece of land a business etc are transferr... View the full answer