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Augustus1 Augustus1
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7 years ago
A corporation is owned 70% by Jones and 30% by Smith. Jones owns 70 shares with a cost of $100 each. Smith owns 30 shares with a cost of $100 per share. The company redeems 20 shares from Jones at a redemption price of $400 per share. No stock is redeemed from Smith. This is not a redemption to pay death taxes, and it is not a partial liquidation. What is the tax impact on Jones?
A) capital gain of $6,000
B) capital gain of $8,000
C) dividend income of $6,000
D) dividend income of $8,000
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
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We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
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MsLippyMsLippy
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Augustus1 Author
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#2
7 years ago
Your explanation helped, amazing amazing!
We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
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