In October 2010, Pedro acquired 100% of Pine Corporation common stock by transferring property with an adjusted basis of $1,400,000 and fair market value of $4,300,000. Pine is a qualified small business corporation. On April 1, 2022, Pedro sells all of the Pine Corporation common stock for $16,400,000. Read the requirements. Requirement a. What is the amount of gain that may be excluded from Pedro's gross income? (Enter a "0" if none of the gain may be excluded from the taxpayer's gross income.) The amount of gain that may be excluded from Pedro's gross income is Requirement b. What would your answer be if the fair market value of the Pine stock were only $840,000 upon its issue? (Enter a "0" if none of the gain may be excluded from the taxpayer's gross income.) Under this condition, the amount of gain that may be excluded from Pedro's gross income is Requirement c. What would your answer be if the stock were sold after two years? (Enter a "0" if none of the gain may be excluded from the taxpayer's gross income.) If the stock were sold after two years, the amount of gain that may be excluded from Pedro's gross income is Requirement d. Can Pedro avoid recognizing gain by purchasing replacement stock? OA. Yes. If Pedro acquires $4,300,000 or more of qualified stock within six months no gain is recognized, providing the original stock was held for over five years. OB. Yes. If Pedro acquires $16,400,000 or more of qualified stock within 60 days no gain is recognized, providing the original stock was held for over six months. OC. Yes. If Pedro acquires $10,000,000 or more of qualified stock within 60 days no gain is recognized, providing the original stock was held for over five years. D. No. Pedro must recognize gain on the sale of the Pine Corporation common stock because the sale exceeded $10,000,000. OO

In October 2010. Pedro acquired 1005, of Pine Corporation common stook by transferring property with an adjusted basis of $1,400,000 and far markel value of \$4, \$00,000. Pne is a quailied small business corporation, On April 1, 2022, Pedro selis al of the Pine Corporation common stock for $16,400,000 Reas the regurements Requirement a. What is the amount of gain that may be excluded from Pedrok gross mocme? (Enter a " v " if none of the gain may be excluded fram the taxpayers gross ncome) The amount of gain that may be exiluded from Pedro's gross hoome is Requirement b. What would your answer be if the fair market vaive of the Pine slock were ony 5440,000 ipon is isue? (Enter a "v" if none of the gan may be exduded from the taxpayers gross income) Under bis condabon, the arnourt of gan that may be excluded trom Pedro's gross income is It the stock were soid ahter two yean. the amount of gain that may be excluded from Pedro's gross income is Requirement d. Can Pedro avoid recogniring gain by purchasing replacement stock? A. Yos. if Pedro acguires $4,300,000 or more of qualifed stock wathin six months no gain is recognized, providng the orignal stock was held foe over five years. B. Yes, it Pedro acguires $16,400,000 or more of qualfed stock within 60 days no gain is recogrized, providing the onginal stock was held for ovar ske months C. Yes. If Pedro acquess $10,000,000 or more of qualfied stock within 60 days no gain is recognized, providing the orginal stock was held for over five years. D. No. Pedro must recognize gain on the sale of the Pine Corporation common stock because the sale exceeded $10,000,000