Paula, chis Dave, unrelated individuals own 30 shares, 30 shares, and 40 shares respectively in Blue Corp. Blue Corp. has 100 shares outstanding and earning and profits of $6,000,000. Blue Corp. Redeems 20 shares of Dave’s stock for $800,000. Dave paid $600,000 for his 40 shares. What are the tax consequences to Dave? What result, if instead Chris was Dave’s father?

Paula, chis Dave, unrelated individuals own 30 shares, 30 shares, and 40 shares respectively in Blue Corp. Blue Corp. has 100 shares outstanding and earning and profits of $6,000,000. Blue Corp. Redeems 20 shares of Dave’s stock for $800,000. Dave paid $600,000 for his 40 shares. What are the tax consequences to Dave? What result, if instead Chris was Dave’s father?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 33P

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