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Craig received a $25,000 distribution from Yellow Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital.

Craig received a $25,000 distribution from Yellow Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital. What effect does this distribution have on Craig's taxable income if his basis in the stock of Yellow is $8,000?


a.    Increase of $25,000

b. Increase of $17,000

c. Increase of $15,000

d. Increase of $10,000

Top Answer

>b. Increase of $17,000 When Craig is receives $15,000 dividend and $10,000 return of capital, then there is an... View the full answer

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