Falzone Company has two shareholders, Rita and Sal Corporation. Rita acquired her 300 shares in 2011 for
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Falzone Company has two shareholders, Rita and Sal Corporation. Rita acquired her 300 shares in 2011 for $30,000 and Sal Corporation acquired its 200 shares in 2007 for $15,000. On August 2, 2019, Falzone Company sold one of its businesses that it had held since 2007. Due to this sale, Falzone Company redeemed 50 shares from each shareholder in exchange for $20,000 each. Falzone’s EXP at the time of the redemption was $250,000. What are the tax consequences of this transaction to Rita and Sal Corporation?
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Related Book For
CCH Federal Taxation Basic Principles 2020
ISBN: 9780808051787
2020 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
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