Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Tanya acquired 1,000 shares of stock in Swan Corporation seven years ago for $100 a share. In the current year, Swan Corporation redeems half of
Tanya acquired 1,000 shares of stock in Swan Corporation seven years ago for $100 a share. In the current year, Swan Corporation redeems half of her shares for $160,000. Assume Tanya has no other transactions this year involving capital assets. If this is a non-qualifying redemption, which of the following is correct after the redemption?
Tonya reports dividend income of $160,000; Tonya has the same total basis and per-share basis in her stock. | ||
Tonya reports dividend income of $160,000; Tonya has the same total basis in her stock but her basis per share is $200 each. | ||
Tonya reports capital gain income of $110,000; Tonya has the same total basis in her stock and her basis per share remains $100 each. | ||
Tonya reports capital gain income of $110,000; Tonya has remaining basis of $50,000 and her per share basis remains $100 each. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started