Question
Boston Strong Corporation has $2 million in Earnings and profits and redeems all its shares, paying cash to the shareholders in exchange for the stock.
Boston Strong Corporation has $2 million in Earnings and profits and redeems all its shares, paying cash to the shareholders in exchange for the stock. Scott receives $100,000 for his shares that have a basis of $60,000. How is the redemption taxed to Scott?
Dividend of $100,000
| Dividend of $40,000 Capital gain of $40,000 No current tax; Scott has a basis in the cash of $60,000
|
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Auditing Concepts For A Changing Environment
Authors: Larry E. Rittenberg, Bradley J. Schwieger
5th Edition
0324223102, 978-0324223101
