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

question 46

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.Smith and Jones are not related.The company redeems Smith's 30 shares 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.Smith will recognize

• A)dividend income of $12,000.
• B)dividend income of $9,000.
• C)capital gain of $12,000.
• D)capital gain of $9,000.

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Individualized communications directed at a specific person or group, often conveying private or sensitive information.

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