On the date of the cash distribution bettys basis in her, Ask an Expert

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Fact Pattern Happy Inc. is a calendar year corporation. Happy Inc. had accumulated earnings and profits of $100,000 and no current earnings and profits when it distributed a total of $160,000 to its two equal shareholders, Betty and Bob. On the date of the cash distribution, Betty's basis in her Happy Inc. stock was $20,000 and Bob's basis in his Happy Inc. stock was $30,000.

What is Bob's adjusted basis in his EFG Inc. stock after the distribution?

a. 0.
b. $5,000.
c. $15,000.
d. none of the above.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M952051

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