The Outstanding Stock of Riccardo Corporation Is Owned as Follows

question 3

Multiple Choice

The outstanding stock of Riccardo Corporation is owned as follows: Robert owns 50% of RMD, Inc. stock. The rest of RMD, Inc. stock is owned by unrelated parties. Riccardo Corporation redeems 90 of Robert's shares of stock for $9,000 in the only redemption transaction this year. Robert's basis for his stock is $10 per share (100 shares @ $10 = $1,000) . Riccardo Corporation has $300,000 in E&P. How much capital gain or dividend income does Robert recognize as a result of this redemption?

• A) $9,000 dividend income
• B) $8,100 capital gain
• C) $8,000 capital gain
• D) 0

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Definitions:

Diversity of Opinion

The presence of varied viewpoints and perspectives within a group, which can enhance decision-making and creativity but also lead to conflicts.

External Change

Modifications or adjustments that occur outside an organization, which can impact its operations and strategies.

Management Philosophy

Relates to the set of beliefs and principles that guide the decision-making, strategies, and leadership practices of a manager or organization.

Type of Business

Categories or classifications of commercial organizations based on factors like ownership, size, and product or service rendered.