Julian, Berta, and Maria Own 400 Shares, 400 Shares, and 200

question 159

Multiple Choice

Julian, Berta, and Maria own 400 shares, 400 shares, and 200 shares, respectively, in Caramel Corporation (E & P of $750,000) . Berta is Julian's sister, and Maria is Julian's aunt. Caramel Corporation redeems all of Julian's stock for $420,000. Julian paid $200 a share for the stock five years ago. Julian continued to serve on Caramel's board of directors after the redemption. With respect to the redemption:

• A) Dividend income of $340,000.
• B) Dividend income of $420,000.
• C) Long-term capital gain of $340,000.
• D) Long-term capital gain of $420,000.
• E) None of the above.

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Definitions:

Expatriates

Individuals residing and working in a country other than their native country, usually for professional or employment reasons.

Host-Country Nationals

Employees who are citizens of the country in which a multinational company operates, but the company itself is based in another country.

Panel Interview

A method of assessment where multiple interviewers (typically from different areas within the company) meet with and interview a candidate simultaneously.

Applicant-Job Match Process

The method used by employers to assess the compatibility between a job's requirements and the qualifications of applicants to ensure the right fit.