A Corporation Is Owned 70% by Jones and 30% by Smith.Jones

question 79

Multiple Choice

A corporation is owned 70% by Jones and 30% by Smith.Jones owns 70 shares with a cost of $100 each.Smith owns 30 shares with a cost of $100 per share.The company redeems 5 shares from Smith at a redemption price of $400 per share.No stock is redeemed from Jones.This is not a redemption to pay death taxes,and it is not a partial liquidation.What is the tax impact on Smith?

• A)$2,000 dividend
• B)$2,000 capital gain
• C)$1,500 dividend
• D)$1,500 capital gain

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Definitions:

Personality Matching

A concept suggesting that individuals tend to form and maintain relationships with those who have similar personality traits.

Dating Sites

Websites that provide a platform for individuals to meet, communicate, and potentially form romantic or sexual relationships.

Empathy

The ability to understand and share the feelings of another person, essentially putting oneself in another's shoes.

Compassion

A feeling of deep sympathy and sorrow for someone struck by misfortune, accompanied by a desire to alleviate the suffering.