The Outstanding Stock of Riccardo Corporation Is Owned as Follows

question 19

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 Kyle's shares of stock for $9,000 in the only redemption transaction this year. Kyle's basis for his stock is $10 per share. Riccardo Corporation has $300,000 in E&P. How much capital gain or dividend income does Kyle 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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Agreement from a client, often required by law or professional standards, before certain actions are undertaken on their behalf.

Professional Negligence

The failure of a professional to perform their duties with the competence that their profession requires, resulting in harm or loss.

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