uestion 6 10 points Save And balance in CEP of 7000 Bob is t

uestion 6 10 points Save And balance in CE&P; of $7,000 Bob is the sole shareholder of Ludhe and has a $15000 Before considering the following distribution (date of distribution, February 6) Ludite, Inc. has a deficit in AESP of ($25,000) and a stock basis. Durin g the current year, Ludite distributed $50,000 to Bob as a non-liquidatin g distribution. Answer each of the following questions relating to this distribution A $35,000 B. $15,000 C.$7,000 D.$43,000 E$28,000 F. None of the answers is comect G. $50,000 How much dividend income does Bob report? How much capital gain does Bob report? tomicah hd at? What is Bob\'s stock basis when the duat clears after this distribution?

Solution

1) A) $7000. Bob reports dividend income = the balance in CE & P

2) E) $ 28000. calculation : 50000-7000 (dividend)- 15000 (stock basis) = 28000

3)A . $ 35000 calculation 50000-15000 (stock basis) = 35000

4) H $ 0. Since after deducting dividend $ 43000 is greater than his basis $ 15000