Question
The outstanding stock of Jastram Corporation is owned as follows: Anthony 100 shares Donna (Anthonys daughter) 100 shares David (Anthonys cousin) 100 shares ADD, Inc.
The outstanding stock of Jastram Corporation is owned as follows:
Anthony 100 shares
Donna (Anthonys daughter) 100 shares
David (Anthonys cousin) 100 shares
ADD, Inc. 100 shares
Total shares outstanding 400 shares
Anthony owns 50% of ADD, Inc. stock. The rest of ADDD, Inc. stock is owned by unrelated parties. Jastram Corporation redeems 90 of Davids shares of stock for $9,000 in the only redemption transaction this year. Davids basis for his stock is $10 per share. Jastram Corporation has $300,000 in E&P. What is David total basis in his remaining 10 shares of stock after the redemption?
A. $0
B. $100
C. $900
D. $1,000
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