eems 1,000 shares from Juan for $250,00 pital gain of $250,000. pital gain of $190,000. dend income of $190,000. dend income of $250,000.
eems 1,000 shares from Juan for $250,00 pital gain of $250,000. pital gain of $190,000. dend income of $190,000. dend income of $250,000.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 40P
Related questions
Question
please answer within 30 minutes.
Transcribed Image Text:Bristlebird Corporation (E & P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his spout
Roberta, owns 1,500 shares. Both Juan and Roberta have a basis of $90,000 in their Bristlebird stock. In the current year, Bristleb
Corporation redeems 1,000 shares from Juan for $250,000. With respect to the distribution in redemption of the Bristlebird stock:
Oa. Juan has a capital gain of $250,000.
Ob. Juan has a capital gain of $190,000.
Oc. Juan has dividend income of $190,000.
d. Juan has dividend income of $250,000.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you