Bristlebird Corporation (E&P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his wife,

Question

3 years ago

13

Bristlebird Corporation (E&P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his wife,

Roberta, owns 1,500 shares. Juan and Roberta each have a basis of $90,000 in their Bristlebird stock. In the current year, Bristlebird Corp. redeems 1,000 shares from Juan for $250,000. With respect to the distribution in redemption of the Bristlebird stock:a. Juan has dividend income of $250,000b. Juan has dividend income of $190,000c. Juan has a capital gain of $250,000d. Juan has a capital gain of $190,000e. None of the above

Business

1 answer:

Schach [20] · Answer 1 · 2022-04-20T16:53:41+03:00

Schach [20]3 years ago

6 0

Answer:

The correct answer is

Juan has dividend income of $250,000.

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