Hannah, Greta, and Winston Own the Stock in Redpoll Corporation

question 66

Multiple Choice

Hannah, Greta, and Winston own the stock in Redpoll Corporation (E & P of $900,000) as follows: Hannah, 600 shares? Greta, 400 shares? and Winston, 1,000 shares. Greta is Hannah's daughter, and Winston is Hannah's brother. Redpoll Corporation redeems 400 of Hannah's shares (basis of $55,000) for $240,000. Hannah purchased the stock three years ago as an investment. With respect to the stock redemption, Hannah has:

• A) Long-term capital gain of $185,000.
• B) Long-term capital gain of $240,000.
• C) Dividend income of $185,000.
• D) Dividend income of $240,000.
• E) None of the above.

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Definitions:

Mean

The mean value of a collection of numbers, determined by adding all the numbers together and then dividing that total by the quantity of numbers in the collection.

Salaries

Fixed regular payments made by employers to employees, typically on a monthly or biweekly basis, in exchange for their work or services.

Ethical Treatment

The provision of humane and morally appropriate care or handling, often discussed in the context of animals or patients.

Animals

Animals are multicellular, eukaryotic organisms in the kingdom Animalia that breathe oxygen and consume organic material.