Question: In the current year, Blue Corporation ( E & P of $ 1 , 0 0 0 , 0 0 0 ) redeems 6 0

In the current year, Blue Corporation (E & P of $1,000,000) redeems 600 shares from Eleanor for $260,000(Eleanors basis in stock was $120,000) in a transaction that does not qualify as a redemption. With respect to the redemption, Eleanor will have a:
a.
$140,000 dividend
b.
$260,000 dividend
c.
$140,000 capital gain
d.
$260,000 capital gain

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