Lamont Is a 100 Percent Owner of Jkl Corporation.

Question 121
Essay

Lamont is a 100 percent owner of JKL Corporation.JKL has been an S corporation since its inception in 2019.During 2020, JKL distributed $20,000 to Lamont.During 2020, JKL reported $5,000 of business income and no separately stated items.What is the amount and character of the gain on the distribution, if any, that Lamont must recognize in each of the following alternative scenarios? Also, what is Lamont's stock basis at the end of 2020 in each of the following scenarios? a.Lamont's stock basis at the beginning of 2020 was $30,000. b.Lamont's stock basis at the beginning of 2020 was $4,000.