Molly Caruso was the sole shareholder of Seneca Resorts Inc. Her basis in the stock was $200,000. Molly died when her stock was worth $5,000,000. Her gross estate, including the stock, was $7,500,000, funeral and administrative expenses amounted to $180,000 and estate taxes totaled $720,000. Seneca Resorts redeemed 20 percent oft he stock from the estate for

$1,200,000 when its E&P was $600,000.

What are the tax consequences to Molly's estate and Seneca Resorts?