Question: 55. LO.6 Justin is one of the shareholders in Flicker, a closely held family C corporation. When his basis in the stock is $120,000, Justin

55. LO.6 Justin is one of the shareholders in Flicker, a closely held family C corporation.

When his basis in the stock is $120,000, Justin receives a distribution of $150,000 from Flicker. Assume that Flicker Corporation has more than $1 million in E & P. What are Justin’s income tax consequences if the distribution from Flicker is treated as

a. A dividend?

b. A stock redemption (i.e., sale or exchange treatment)?

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