A1 Corporation has 1,000 shares of common stock outstanding as follows: Greg 500 shares and Heidi (an unrelated party) 500 shares. Greg and Heidi each paid $100 per share for the A1stock 10 years ago. A1 distributes land held as an investment (fair market value $80,000, adjusted basis of $30,000) to Heidi in redemption of 250 of her shares.

a. What are the tax results to Heidi on the redemption of A1 stock?

b. What gain or loss results to A1 corporation on the redemption?

c. Assume that A1's E&P is $170,000 after any required adjustment for the gain or loss on the land distribution but before any required adjustment for the stock redemption. What is the reduction in A1's E&P as a result of the redemption?

THANKS!!

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Originally Posted by greg736

A1 Corporation has 1,000 shares of common stock outstanding as follows: Greg 500 shares and Heidi (an unrelated party) 500 shares. Greg and Heidi each paid $100 per share for the A1stock 10 years ago. A1 distributes land held as an investment (fair market value $80,000, adjusted basis of $30,000) to Heidi in redemption of 250 of her shares.

a. What are the tax results to Heidi on the redemption of A1 stock?

b. What gain or loss results to A1 corporation on the redemption?

c. Assume that A1's E&P is $170,000 after any required adjustment for the gain or loss on the land distribution but before any required adjustment for the stock redemption. What is the reduction in A1's E&P as a result of the redemption?

THANKS!!!

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So, nobody else know how to do this either huh?