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During 2010, Lion Corporation incurs the following...




During 2010, Lion Corporation incurs the following transactions. Net income from operations $100,000 Interest income from savings account 3,000 Long-term capital gain from sale of securities 10,000 Short-term capital loss from sale of securities 4,000 Lion maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Penny. As a result, Penny must recognize: a. Ordinary income of $103,000 and long-term capital gain of $5,000. b. Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. c. Ordinary income of $108,000. d. None of the above.


Paper#4494 | Written in 18-Jul-2015

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