QUESTION 1 Margarita had a basis of $60,000 in the stock in Andrea Corporation which she sold to Tony on July 31, 2020 for 585,000 Andrea Corporation had Accumulated Earnings And Profits E&P) of 545,000 on January 1 2020 and Current Earnings And Profes (E&P) for 2020 of $40,000 During the tax year of 2020 Andrea Corporation made the following distributions $80,000 Cash to Margarita on July 1, 2020 and 580,000 Cash to Tony on December 30 2020 Tony's remaining basis in his stock is $25.000 $30,000 550.000 $70.000