What is a stock redemption

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Reference no: EM13873963 , Length: 900 words

Explain the answers of given question below :

Q.1 What is a stock redemption? What are some reasons for redeeming stock? Why are some redemption treated as sales and others as dividends?

Q.2 Neil purchased land from Spring Harbor, his 100%-owned corporation, for $275,000. The corporation purchased the land three years ago for $300,000. Similar tracts of land located nearby have sold for $400,000 in recent months. What tax issues should be considered with respect to the corporation's sale of the land?

Q.3 Explain why a shareholder receiving a liquidating distribution would prefer to receive either capital gain treatment or ordinary loss treatment.

Reference no: EM13873963

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