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Compute the stock and building basis after the redemption

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Question - Donald Lump and his two sons owned 100 percent of Nut Cakes, Inc. Donald owned 50 percent of the stock, but he had 25 pe the corporation for a building with Donald's basis of $10,000 and a value of $50,000. If E&P is $200,000 and Donald's basis in his stock before the distribution was $20,000, compute the stock and building basis after the redemption?

a. stock basis $10,000 building basis $50,000

b. stock basis $20,000 building basis $50,000

c. stock basis $20,000 building basis $10,000

d. stock basis $10,000 building basis $10,000

Reference no: EM132697037

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