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

question 105

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 20 shares from Jones at a redemption price of $400 per share.No stock is redeemed from Smith.This is not a redemption to pay death taxes,and it is not a partial liquidation.What is the tax impact on Jones?

• A)capital gain of $6,000
• B)capital gain of $8,000
• C)dividend income of $6,000
• D)dividend income of $8,000

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Definitions:

Suicidal Ideation

Thinking about, considering, or planning suicide.

Low-SES Family

Families that are categorized as having low socio-economic status, often determined by income, education, and occupation, which may affect access to resources and opportunities.

Minority Ethnic Group

A category of people who are distinguished by physical or cultural traits, who are fewer in number compared to the majority population in a society.

Parasuicide

Any potentially lethal action against the self that does not result in death. Also called attempted suicide or failed suicide.