Jackson, an individual, is a shareholder in Cadduceus Corp., a C corporation with $40,000 in accumulated earnings and profits. Cadduceus Corp. redeems some of its stock from Jackson for $200,000 as part of a qualifying partial liquidation. Jackson’s adjusted basis in the stock at the time of redemption was $50,000. For tax purposes, how will Jackson report the effects of this redemption of stock?

• As a $40,000 dividend only.

• As a $150,000 capital gain.

• As a $40,000 dividend and $110,000 capital gain.

• As a $10,000 capital loss.

Answer rating: 100% (QA)

Answer Option B As a 150000 capital Gain Explanation A redemption of share... View the full answer