During the year Mr T the sole shareholder redeemed 20 shares of the stock of D c
ID: 341360 • Letter: D
Question
During the year Mr T the sole shareholder redeemed 20 shares of the stock of D corporation for $15000. The basis of the shares redeemed was $8000 and D Corporation E & P is $10000. Assuming that the redemption does not qualify for the sale treatment Mr T will report a dividend of how much? During the year Mr T the sole shareholder redeemed 20 shares of the stock of D corporation for $15000. The basis of the shares redeemed was $8000 and D Corporation E & P is $10000. Assuming that the redemption does not qualify for the sale treatment Mr T will report a dividend of how much?Explanation / Answer
Redemtion price = $15,000
Basis of shares redeemed = $8,000
E & P = $10,000
Hence, value of diviidends = 15000-8000 = $7,000
Since, this does not qualify for sale treatment, Mr T will report a dividend of $7,000
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