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Shannonowns 100shares(100%)oftheBlueMoonScorporationatthebeginningoftheyear.OnMarch16(75daysintotheyear),Shannonsells30%ofhersharestoStephanie.BlueMoonproduces$100,000ofordinaryincomeduringtheyear($10,000ofincomethroughMarch16,and$90,000ofincomeafterMarch16).AssumingthereisanelectionmadetoterminatethetaxyearonMarch16,whatistheproperincomeallocationforShannonandStephanie? a. Shannon - $52, 176; Stephanie - $47,824. b. Shannon - $70,000; Stephanie - $30,000. c. Shannon - $76,164 - Stephanie - $23,836
Shannonowns 100shares(100%)oftheBlueMoonScorporationatthebeginningoftheyear.OnMarch16(75daysintotheyear),Shannonsells30%ofhersharestoStephanie.BlueMoonproduces$100,000ofordinaryincomeduringtheyear($10,000ofincomethroughMarch16,and$90,000ofincomeafterMarch16).AssumingthereisanelectionmadetoterminatethetaxyearonMarch16,whatistheproperincomeallocationforShannonandStephanie?
| a. | Shannon - $52, 176; Stephanie - $47,824. | |
| b. | Shannon - $70,000; Stephanie - $30,000. | |
| c. | Shannon - $76,164 - Stephanie - $23,836 | |
| d. | Shannon - $73,000; Stephanie - $27,000 |
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