Sam Owns 30% of the Stock of Gold,Inc

question 125

True/False

Sam owns 30% of the stock of Gold,Inc.(adjusted basis of $300,000).Gold redeems 70% of Sam's shares for $500,000.If the stock redemption qualifies for return of capital treatment,Sam's recognized gain is $200,000.

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Definitions:

Right to Inspect

The authorized capacity to examine or review something for accuracy, quality, or condition.

Goods

Items that are manufactured or produced for sale.

Shipped

The act of sending or transporting goods from one place to another, typically referring to the movement of merchandise after a sale.

Implied Warranty

An unwritten and unspoken guarantee that a product or service meets the minimum quality and functionality standards, assumed in a sale.