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Clark, Bruce, and Diana, unrelated individuals, own all of the stock in Trinity Corporation (E & P of $1.2 million) as follows: Clark, 1,500 shares;
Clark, Bruce, and Diana, unrelated individuals, own all of the stock in Trinity Corporation (E & P of $1.2 million) as follows: Clark, 1,500 shares; Bruce, 300 shares; and Diana, 200 shares. Trinity redeems 900 of Clarks shares (basis of $210,000) for $625,000. With respect to the distribution in redemption of the stock:
a. | Clark has a capital gain of $415,000. | |
b. | Clark has a capital gain of $625,000. | |
c. | Clark has dividend income of $415,000. | |
d. | Clark has dividend income of $625,000. | |
e. | None of the above. |
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