Rose has a $20,000 basis in the 60% of the parent corporation stock that she owns. parent corporation owns a 70% interest in child corporation. parent and child have current and accumulated e& p balances of $25,000 and $40,000, respectively. in return for $15,000, rose sells 10% of the parent corporation stock to child corporation. what is the impact of the transaction on rose? a) rose will recognize a $5,000 capital gain. b) rose will be treated as having received a $15,000 dividend distribution from child corporation. c) rose will be treated as having sold stock to parent corporation and recognize a $15,000 capital gain. d) rose will be treated as having received a $15,000 dividend from parent corporation.

b is the correct answer

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.