How much income does matt recognize

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Problem 1: Matt owns 10 percent of the 5,000 shares of Green Corporation. On July 1, 2020, Green Corporation declares a 5% stock dividend to all shareholders. The FMV of Green stock at the distribution is $50 per share. Green Corporation has current E&P of $420,000. How much income does Matt recognize?

Option 1: $2,500
Option 2: $5,000
Option 3: $1,250
Option 4: $0

Reference no: EM132842364

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