Crown Corporation has a total of 400 shares of stock outstanding. Crown Corp redeems 100...

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Crown Corporation has a total of 400 shares of stock outstanding. Crown Corp redeems 100 shares from its sole shareholder- Charles. Charles' basis in his 400 shares was $400,000. Crown pays Charles $300,000 on 12.31 of the current year to redeem his stock. Crown had Current Year E & P of $800,000; and an Accumulated DEFICIT in E&P of $(700,000). Charles asks - How do it treat this $300,000 I got?
Okay - How else can our shareholders "get their money back" on their investment? Have the CORP redeem some shares!
Crown Corporation has a total of 400 shares of stock outstanding. Crown Corp redeems 100 shares from its sole shareholder- Charles. Charles' basis in his 400 shares was $400,000. Crown pays Charles $300,000 on 12.31 of the current year to redeem his stock. Crown had Current Year E & P of $800,000; and an Accumulated DEFICIT in E&P of $(700,000). Charles asks - How do it treat this $300,000 I got?
Dividend of $100,000
Dividend of $300,000
Capital Gain of $200,000
Capital Loss of $(100,000)

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