Exam Question 25 of 25 Select the best answer Sammie receives a qualified lump-s

Question

Exam Question 25 of 25 Select the best answer Sammie receives a qualified lump-sum distribution of 2,000 shares of employer corporate stock. The stock has a market value of $80 per share on the date of distribution. In addition, Sammie is notified that the basis in the stock is $50 per share. Sammie sells the stock for $120 per share after holding the stock for two years. What amount of ordinary income, attributable to the LSD, does Sammie recognize in the year of the distribution, if he does not elect TYA? A. 50 B. $60,000 C. $100,000 D. $140,000

Explanation / Answer

Answer : D. $140000

=>The ordinary income on LSD, if does not elect TYA = selling price - value base of the stock = ($120 - $50) 2000 = $140000

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