Fred Farmer and his two sons owned 100 percent of Fruits and Nuts, Inc. Fred owned 50 percent of the stock, but he had 25 percent redeemed by the corporation for a building with a basis of $10,000 and a value of $50,000. If E&P is $200,000 and Fred's basis in his stock before the redemption was $20,000, the stock and building basis after the redemption are:

a. Stock basis: $10,000; building basis: $50,000

b. Stock basis: $20,000; building basis: $50,000

c. Stock basis: $10,000; building basis: $10,000

d. Stock basis: $20,000; building basis: $10,000

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Stock and building basis after the redemption : Fred Farmer and his two sons owned 100 percent of Fruits and Nuts, Inc. Fred owned 50 percent of the stock, but he had 25 percent redeemed by the corporation for a building with a basis of $10,000 and a value of $50,000. If E&P is $200,000 and Fre.. |

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