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Question - As of January 3, 20X1, Bennett and Malik each owned 100 shares of the 200 issued shares of Fedderman stock. On January 31, 20X1, Bennett and Malik each sold 50 shares to Gibbs. No election was made to terminate the tax year. Fedderman had net business income of $10,000 for the year ended December 31, 20X1, and made no distributions to its shareholders. Fedderman's 20X1 calendar year had 363 days. What amount of net business income should have been reported on Gibbs's 20X1 Schedule K-1 from Fedderman? (20X1 is a 363-day tax year.)
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