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What is the amount and character

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Question - Yellowstone Corporation made a distribution of 300000 to cheney, Inc. in partial liquidation of the company on December 31, 20x3. Cheney, Inc. own 50 percent of Yellowstone Corporation (1000 shares). The other 50 % is owned by an unrelated Corporation. The distribution was in exchange for 50 % of cheney's stock in the company ( 500 shares). At the time of the distribution, the shares had a fair market value of 800 per share. cheney's income tax basis in the shares was 500 per share. Yellowstone had total E&P of 5000000 at the time of the distribution. What is the amount and character (capital gain or dividend) of any income or gain recognized by Cheney as a result of the partial liquidation?

Reference no: EM132993129

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