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Jackson, an individual, is a shareholder in Cadduceus Corp., a C corporation with $40,000 in accumulated earnings and profits. Cadduceus Corp. redeems some of its
Jackson, an individual, is a shareholder in Cadduceus Corp., a C corporation with $40,000 in accumulated earnings and profits. Cadduceus Corp. redeems some of its stock from Jackson for $200,000 as part of a qualifying partial liquidation. Jacksons adjusted basis in the stock at the time of redemption was $50,000. For tax purposes, how will Jackson report the effects of this redemption of stock?
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As a $40,000 dividend only.
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As a $150,000 capital gain.
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As a $40,000 dividend and $110,000 capital gain.
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As a $10,000 capital loss.
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