Hazel, Emily, and Frank, Unrelated Individuals, Own All of the Stock

question 21

Multiple Choice

Hazel, Emily, and Frank, unrelated individuals, own all of the stock in Wren Corporation (E & P of $1.2 million) as follows: Hazel, 1,300 shares; Emily, 400 shares; and Frank, 300 shares.Wren redeems 300 of Hazel's shares (basis of $60,000) for $450,000.With respect to the distribution in redemption of the stock:

• A)Hazel has a capital gain of $390,000.
• B)Hazel has dividend income of $450,000.
• C)Hazel has dividend income of $390,000.
• D)Hazel has a capital gain of $450,000.
• E)None of the above.

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Definitions:

Dominance

The power and influence one individual or group has over another, often used in the context of social hierarchies.

Supportive Style

A manner of interaction that provides encouragement, feedback, and assistance in a positive way.

Emotive

Related to or provoking strong feelings, emotions, or responses.

Communication Style

The manner in which individuals express themselves and interpret messages from others, influenced by cultural, personal, and situational factors.