Question

nyle Corp. owned 100 shares of Beta Corp. stock that it bought in 1993 for $9 per share. In 2014, when the fair market value of the Beta stock was $20 per share, Nyle distributed this stock to a noncorporate shareholder. Nyle's recognized gain on this distribution was:

Answer 1

$1100.

Step-by-step explanation:

We have been given that Nyle Corp. owned 100 shares of Beta Corp. stock that it bought in 1993 for $9 per share. In 2014, when the fair market value of the Beta stock was $20 per share.

Nyle's recognized gain on this distribution would be:

`\text{Value of 100 share at a rate of }\$20\text{ per share }-\text{Value of 100 share at a rate of }\$9\text{ per share}`

`\$20*100-\$9* 100=100(\$20-\$9)=100(\$11)=\$1100`

Therefore, Nyle's recognized gain on this distribution was $1100.