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Aaron, an individual taxpayer in the 28% tax bracket, acquired stock in AB Corporation 5 years ago for $2,000. AB Corp. redeemed all Aaron's shares

Aaron, an individual taxpayer in the 28% tax bracket, acquired stock in AB Corporation 5 years ago for $2,000. AB Corp. redeemed all Aaron's shares for $3,000 in 2016.

(a) What is Aaron's tax liability from this transaction if it qualifies for a sale or exchange treatment?

(b) What is Aaron's tax liability from this transaction if it qualifies for a dividend treatment?

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