Tammy Owns 100 Shares in Star Struck Corporation

question 2

Multiple Choice

Tammy owns 100 shares in Star Struck Corporation. The other 100 shares are owned by her husband, Tommy. Which of the following statements is true?

• A) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as an exchange for tax purposes.
• B) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as a dividend for tax purposes.
• C) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as an exchange if Tammy waives the family attribution rules and files a "triple i" agreement with the IRS.
• D) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as a dividend to the extent that the redemption exceeds Tammy's tax basis in the redeemed shares.

---

Definitions:

Clear A Cell

The action of removing all content, formatting, and data from a selected cell in spreadsheet software.

Overtype Mode

A text input mode in which new characters replace existing characters directly in front of the cursor.

Insert Mode

A mode in text editors where new text entered is inserted at the cursor position, shifting existing text to the right.

Proposed Worksheet

A concept or preliminary plan for a worksheet, often in spreadsheet applications, suggesting a layout or organization of data for review or approval.