Viking Corporation is owned equally by Sven and his wife Olga, each of whom hold 100

shares in the company. Viking redeemed 75 shares of Sven's stock in the company on

December 31, 20X3. Viking paid Sven $2,000 per share. His income tax basis in each share

is $1,000. Viking has total E&P of $500,000. What are the tax consequences to Sven because

of the stock redemption?

A. $75,000 capital gain and a tax basis in each of his remaining shares of $1,000.

B. $75,000 capital gain and a tax basis in each of his remaining shares of $2,000.

C. $150,000 dividend and a tax basis in each of his remaining shares of $1,000.

D. $150,000 dividend and a tax basis in each of his remaining shares of $4,000.