C, an Individual, Owns 80 of the 100 Shares of T

question 12

Multiple Choice

C, an individual, owns 80 of the 100 shares of T Corporation stock outstanding while the remaining shares are owned by unrelated parties.T's basis in the 80 shares is $1,600, or $20 per share.This year T redeemed 10 shares of C for $4,000.Assuming the redemption does not qualify for sale treatment and T has substantial E&P, C's dividend income and basis in his remaining shares will be

• A)A dividend of $4,000 and a basis of $1,600
• B)A dividend of $3,800 and a basis of $1,400
• C)A dividend of $4,000 and a basis of $ 1,400
• D)A dividend of $3,800 and a basis of $1,600
• E)None of the above

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