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Rasputin owns 500 shares of the total outstanding stock of 750 shares for Magenta Company.

His stock basis is $50,000. Rasputin, subsequently, sells 250 of his shares back to Magenta Company for $20,000. Magenta Company has E & P of $100,000. Rasputins sale of his stock to

Magenta Corporation will be treated as (show work, as to why):

A) dividend income

B) a sale transaction

C) a return of capital

D) some other treatment

Bryan owns 25% of Raisman Corporation's single class of stock (Bryan owns 500 of 2,000 outstanding shares). Bryan's basis in the stock is $110,000. Raisman's E&P is $132,000. If Raisman redeems 100 of Bryan's stock for $28,000, Brian must report dividend income (if

any) of (show all work and explain your answer):

A) $0.

B) $11,200.

C) $16,800.

D) $28,000.