C, an individual, owns 80 of the 100 shares of T Corporation stock outstanding while the remaining
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Question:
C, an individual, owns 80 of the 100 shares of T Corporation stock outstanding while the remaining shares are owned by unrelated parties. T’s basis in the 80 shares is $1,600, or $20 per share. This year T redeemed 10 shares of C for $4,000. Assuming the redemption does not qualify for sale treatment and T has substantial E&P, C’s dividend income and basis in his remaining shares will be
a. A dividend of $4,000 and a basis of $1,600.
b. A dividend of $3,800 and a basis of $1,400.
c. A dividend of $4,000 and a basis of $1,400.
d. A dividend of $3,800 and a basis of $1,600.
e. None of the above
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date: