ABC Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Josh (550 shares) and Steve (450 shares), who are unrelated individuals. ABC redeems 300 of Josh’s shares for $1,000 per share. Josh paid $50 per share for his ABC stock nine years ago. 1. Is this a qualified redemption? Why? 2. What is Josh’s realized gain/ loss? What is Josh’s recognized gain/ loss? 3. What is the character of the recognized gain/ loss?

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