On January 1, 20x2, Preston owned all of the outstanding stock of BIG Corporation. Her adjusted basis in the stock was $20,000.

During 20x2, BIG has earnings & profits of $20,000, and Preston received distributions from BIG in the amount of $220,000. As of December 31, 20x1, BIG Corp had accumulated earnings & profits of $150,000. 

What is the amount and character of income Preston must recognize in 20x2?

Question:

A taxpayer owns 100 shares of stock with a basis of $1,000. The shares are sold for $925. Taxpayer then purchases 100 shares of substantially identical stock 15 days later for $850.

What is the taxpayer's basis in the new shares?

Answer rating: 100% (QA)

For the first question Preston must recognize the amount of distributions received from BIG Corporat... View the full answer