Elijah owns 20% of Park Corporation's single class of stock. Elijah's basis in the stock is $8,000. Park's E&P is $28,000. If Park redeems all of Elijah's stock for $48,000, Elijah must report dividend income of
A)$0.
B)$28,000.
C)$40,000.
D)$48,000.

Question

Quizplus · Accepted Answer

Elijah's basis in the stock is $8,000. Park's E&P is $28,000. If Park redeems all of Elijah's stock for $48,000, Elijah must report dividend income of $28,000.

Elijah Owns 20% of Park Corporation's Single Class of Stock