Bristlebird Corporation (E & P of $700,000) Has 3,000 Shares

Multiple Choice

Bristlebird Corporation (E & P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his wife, Roberta, owns 1,500 shares. Both Juan and Roberta have a basis of $90,000 in their Bristlebird stock. In the current year, Bristlebird Corporation redeems 1,000 shares from Juan for $250,000. With respect to the distribution in redemption of the Bristlebird stock:

A) Juan has dividend income of $250,000.
B) Juan has dividend income of $190,000.
C) Juan has a capital gain of $250,000.
D) Juan has a capital gain of $190,000.
E) None of these.