Determine the tax consequences to the shareholder

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Reference no: EM131290045

Sunset Corporation, with E & P of $400,000, makes a cash distribution of $120,000 to a shareholder. The shareholder’s basis in the Sunset stock is $50,000.

a. Determine the tax consequences to the shareholder if the distribution is a nonqualified stock redemption.

The shareholder has dividend income of $_____________.

b. Determine the tax consequences to the shareholder if the distribution is a qualifying stock redemption.

The shareholder has a capital gain of $______________.

c. Determine the tax consequences to the shareholder if the distribution is pursuant to a complete liquidation of Sunset.

The shareholder has a capital gain of $_______________.

Reference no: EM131290045

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