Fas inc had one class of stock outstanding assume that fas


FAS Inc. had one class of stock outstanding. The one class of stock was owned 50 percent by Fred and 25 percent by each of Fred’s two sons. In the current taxable year, FAS Inc. redeemed 25 percent of Fred’s 50 percent, and in exchange for the stock, FAS Inc. distributed to Fred a building that had an adjusted basis to FAS Inc. of $10,000 and a fair market value of $50,000. Assume that FAS Inc.’s current earnings and profits were $200,000, there were no accumulated earnings and profits, and Fred’s total basis in his stock before the redemption was $20,000. What is Fred’s basis in his remaining stock after the redemption, and what is his basis in the building distributed to him? A. Stock basis: $10,000; building basis: $10,000. B. Stock basis: $10,000; building basis: $50,000. C. Stock basis: $20,000; building basis: $10,000. D. Stock basis: $20,000; building basis: $50,000.

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Financial Accounting: Fas inc had one class of stock outstanding assume that fas
Reference No:- TGS01689073

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