Kent Corp. is a calendar-year, accrual-basis C corporation. In 2007, Kent made a nonliquidating distribution of property with an adjusted basis of $150,000 and a fair market value of $200,000 to Reed, its sole shareholder. The following information pertains to Kent:
|
Reed’s basis in Kent stock at January 1, 2007 |
$500,000 |
|
Accumulated earnings and profits at January 1, 2007 |
125,000 |
|
Current earnings and profits for 2007 |
60,000 |
What was taxable as dividend income to Reed for 2007?
- $ 60,000
- $150,000
- $185,000
- $200,000