Elijah Owns 20% of Park Corporation's Single Class of Stock

question 66

Multiple Choice

Elijah owns 20% of Park Corporation's single class of stock. Elijah's basis in the stock is $8,000. Park's E&P is $28,000. If Park redeems all of Elijah's stock for $48,000, Elijah must report dividend income of

• A)$0.
• B)$28,000.
• C)$40,000.
• D)$48,000.

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Definitions:

Contribute

To give something, such as money, goods, or time, to a common fund or cause.

Benefit

Benefit refers to the positive impact or gain received from a product, service, or action, often used in comparison to costs to assess worthiness or efficacy.

Public Entertainment

Activities or performances, such as concerts, movies, or games, offered to the general public for enjoyment and leisure.

Dominant Strategy

A strategy that is best for a player in a game regardless of the strategies chosen by the other players.