All of Sphere Corporation's Single Class of Stock Is Owned

question 96

Multiple Choice

All of Sphere Corporation's single class of stock is owned by four unrelated individuals in the following manner: Zack 27%, Xu 24.33%, Yvonne 24.33%, and Win 24.33%. Some of Zack's stock holdings are redeemed by Sphere Corporation, resulting in Zack's interest being reduced to 22.27%. Xu, Yvonne, and Win owned equally the remaining 77.73% of the Sphere stock. How should the redemption of Zack's stock be treated by Zack?

• A)dividend income
• B)sale transaction
• C)return of capital
• D)some other treatment

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Definitions:

FOIA

The Freedom of Information Act, a law that gives citizens the right to access information from the federal government.

Slow Process

A situation or procedure that takes a longer time to complete than expected or desired, often causing delays.

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Guidelines and legal principles that determine what evidence is admissible in court.

Civil Procedure

The body of law governing the processes and rules that courts follow in civil lawsuits, including the steps of bringing a lawsuit, pretrial proceedings, trial, and possible appeal.