F&D Inc Ceased Operations and Dissolved Under State Law in 2018

F&D Inc. ceased operations and dissolved under state law in 2018. Mrs. Herron, a 20% shareholder, received a $490,300 liquidating distribution from F&D. This year, the IRS determined that F&D underpaid its 2017 and 2018 income tax by $967,100. How much of this deficiency can the IRS assess against Mrs. Herron?

A) -0-
B) $193,420
C) $490,300
D) $967,100

Correct Answer:

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