During the year Mr T the sole shareholder redeemed 20 shares of the stock of D c

Question

During the year Mr T the sole shareholder redeemed 20 shares of the stock of D corporation for $15000. The basis of the shares redeemed was $8000 and D Corporation E & P is $10000. Assuming that the redemption does not qualify for the sale treatment Mr T will report a dividend of how much? During the year Mr T the sole shareholder redeemed 20 shares of the stock of D corporation for $15000. The basis of the shares redeemed was $8000 and D Corporation E & P is $10000. Assuming that the redemption does not qualify for the sale treatment Mr T will report a dividend of how much?

Explanation / Answer

Redemtion price = $15,000

Basis of shares redeemed = $8,000

E & P = $10,000

Hence, value of diviidends = 15000-8000 = $7,000

Since, this does not qualify for sale treatment, Mr T will report a dividend of $7,000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.