Denny is a shareholder in Urban Corporation. Urban Corporation decides to redeem some of Denny$$s

stock. Prior to the redemption, Denny owns $70$ shares $($out of $100$ total shares outstanding$).$ Denny

originally paid $$50$ per share for the stock. Urban Corporation pays Denny $$6,200$ to redeem $60$ of his

shares.

Required:

 

$($a$)$ What is Denny$$s percentage ownership of Urban Corporation after the redemption?

$($b$)$ How much gain$/$income will Denny report as a result of the redemption?

$($c$)$ What type of income will this be$?$ Please circle the correct response.

dividend capital gain ordinary income