The answer is the fourth sentence, the collection of things a person has done. Hope I could help! :D
When she altered her shopping patterns and buying behavior because of substantial pay raise, it is an example of income effect.
In economics, Income effect explains how their is a <u>change in demand</u> in market caused by of a change in <u>consumer's purchasing power</u> as a result of a <u>change in their real income</u>.
Here, the theory of <u>income effect</u> explains Gall's situation because her increase in pay cut changes her purchasing power, thus, increases her demand for expensive goods.
In conclusion, when she altered her shopping patterns and buying behavior because of substantial pay raise, it is an example of income effect.
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Answer:
C. Buddy cannot be a creditor of the corporation after the redemption.
Explanation:
"A stock redemption that terminates a shareholder’s entire stock ownership in a corporation will qualify for sale or exchange treatment under § 302(b)(3). The attribution rules generally apply in determining whether the shareholder’s stock ownership has been completely terminated. However, the family attribution rules do not apply to a complete termination redemption if the following conditions are met:
The former shareholder has no interest, other than that of a creditor, in the corporation for at least 10 years after the redemption (including an interest as an officer, director, or employee).
The former shareholder files an agreement to notify the IRS of any prohibited interest acquired within the 10-year period and to retain all necessary records pertaining to the redemption during this time period."
Reference: South-Western, Thomson. “Chapter 5.” To Qualify for Sale or Exchange Treatment, a Stock Redemption Generally Must Result in a Substantial Reduction in a Shareholde, 2005,
Answer:
A short term capital gain of $13,056
Explanation:
Data provided in the question:
Purchasing price of the shares = $54,400
Calling value of the stocks = $68,000
Premium received = $544
Now,
The amount of Glenna's gain or loss
= Calling value of the stocks - Purchasing price of the shares - Premium received
= $68,000 - $54,400 - $544
= $13,056
here,
the positive answer means a gain
Since,
The gain is realized from the sale of the stocks
therefore, it is a short term capital gain
Hence,
A short term capital gain of $13,056