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. Both Thu and Tuan own one-half of the stock of Wren, Inc., a C...

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Accounting

. Both Thu and Tuan own one-half of the stock of Wren, Inc., a C corporation. Each shareholder holds a stock basis of $175,000. Wren has accumulated E & P of $300,000. Wrens taxable income for the current year is $100,000, and it distributes $75,000 to each shareholder. Thus stock basis at the end of the year is:

a. $0.

  1. $100,000.
  2. $150,000.
  3. $175,000.

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