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Ali, a corporate executive, is in the 35% tax bracket. He acquired 1,000 shares of stock in Cardinal Corporation seven years ago for $300 a share.

This question was answered on Apr 22, 2010. View the Answer
Ali, a corporate executive, is in the 35% tax bracket. He acquired 1,000 shares of stock in Cardinal Corporation seven years ago for $300 a share. In the current year, Cardinal Corporation redeems all of his shares for $700,000. Cardinal Corporation has adequate E & P to cause any distribution to be dividend income. What are the tax consequences to Ali if: a.
The redemption qualifies for sale or exchange treatment, and Ali has no other transactions in the current year involving capital assets?




b.
The redemption does not qualify for sale or exchange treatment?

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This question was asked on Apr 22, 2010 and answered on Apr 22, 2010.

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