44. Successful Corporation distributes $75,000 to its sole shareholder Agatha. Successful has earnings and profits of $65,000 and Agatha's basis in her stock is $20,000. After the distribution, Agatha's basis is A) $10,000. B) $15,000 C) $20,000. D) $60,000. 45. Which of the following requirements must be met for a redemption to be treated as substantially disproportionate? A) The shareholder must own less than 50 % of the outstanding stock (in terms of voting power) after the redemption. B) After the redemption, the shareholder must own less than 80 % of his percentage ownership of voting stock prior to the redemption. C) After the redemption, the shareholder must own less than 80 % of his percentage ownership of common stock (voting and nonvoting) prior to the redemption. D) All of the above must be met. 46. Smith owns 750 shares of the total outstanding stock of 1,000 shares for Blue Company Her stock basis is $50,000. Smith, subsequently, sells 200 of her shares back to Blue Company for $20,000. Blue Company has E & P of $80,000. Smith's sale of her stock to Blue Corporation will be treated as: A) dividend income B) a sale transaction C) a return of capital D) some other treatment 47. Ally owns 25% of Raisman Corporation's single class of stock. Ally's basis in the stock is $12,000. Raisman's E&P is $32,000. If Raisman redeems all of Ally's stock for $28,000, Ally must report dividend income of A) $40,000 B) $30,000 C) $20,000. D) $0 48. Identify which of the following statements is false A) The distribution of stock rights is generally tax free under Sec. 305. B) The distribution of stock rights will be taxable if the value of the stock rights is 15% of the value of the underlying stock. C) If the value of stock rights is less than 15% of the value of the underlying stock, the basis of the rights is zero unless the shareholder elects to allocate basis to the rights. D) The holding period for stock rights includes the holding period for the underlying stock more than