Jennifer owns two blocks of stock in the Field Corporation. She acquired the first block of...

 

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Jennifer owns two blocks of stock in the Field Corporation. She acquired the first block of 200 shares on January 10, 2020 for $20,000. She acquired the second block of 50 shares on July 7, 2022 for $12,500. Together, Jennifer's two blocks of stock represent 10 percent of the outstanding shares of Field Corporation. Pursuant to Field's plan of complete liquidation, Jennifer received a distribution of $50,000 on December 1, 2023 and her shares were canceled. On that date, Field had undistributed earnings and profits of $650,000. What will Jennifer recognize as a result of the distribution? Jennifer owns two blocks of stock in the Field Corporation. She acquired the first block of 200 shares on January 10, 2020 for $20,000. She acquired the second block of 50 shares on July 7, 2022 for $12,500. Together, Jennifer's two blocks of stock represent 10 percent of the outstanding shares of Field Corporation. Pursuant to Field's plan of complete liquidation, Jennifer received a distribution of $50,000 on December 1, 2023 and her shares were canceled. On that date, Field had undistributed earnings and profits of $650,000. What will Jennifer recognize as a result of the distribution?

Answer rating: 100% (QA)

To determine Jennifers taxable income from the distribution we need to calculate her basis in the Fi... View the full answer