Question
6. In February 2020, the Meaw (U.S. Corporation) pays to each shareholder a dividend of $2,000 on its common stock. Mun Mun and Wanton are
6. In February 2020, the Meaw (U.S. Corporation) pays to each shareholder a dividend of $2,000 on its common stock. Mun Mun and Wanton are two unrelated shareholders of the company. Mun Mun purchased the stock three year ago and continues to hold it. Wanton purchased the stock 18 days before it went ex-dividend and sold it 20 days later the ex-dividend date. If both Mun Mun and Wanton are in the 12% marginal tax bracket, what is the tax liability on dividend income for Mun Mun and Wanton, respectively? A. Mun Mun: $0 / Wanton: $0
B. Mun Mun: $0 / Wanton: $240
C. Mun Mun: $240 / Wanton: $0
D. Mun Mun: $240 / Wanton: $240 E. Mun Mun: $240 / Wanton: $2,000
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