1. Facts: Of Cyans 4,000 shares: 1) Angelica owns 2,000 shares; 2) Angelicas son, Dean, owns 1,500 shares; and 3) Angelicas uncle, Walter, owns 500 shares

A) How many Cyan shares does Angelica directly and indirectly own?

B) If her son, Dean waives the family attribution rules and all of her own 2,000 shares are redeemed how do the following situations affect the complete termination of her ownership in Cyan? Angelica remains a director of Cyan 3 years after the 2014 redemption, Angelica loans $100,000 to Cyan & receives from Cyan a 2 year note receivable Angelicas son, Dean replaces her as a president of Cyan 6 years after the 2014 redemption, Angelica receives 250 shares of Cyan as a gift from her uncle, Walter.

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2) John owned 100 shares ($100 basis; 30% ordinary income tax rate; 20% dividend income tax rate) of Green Corp which had the following ownership rights, voting rights in Green and rights to Greens assets if it liquidated. Pink redeemed all of Johns Pink stock that had voting and liquidation rights by exchanging Johns stock for new Green stock that has no liquidation rights but still has voting rights

A) Is the redemption not essentially equivalent to a dividend? Explain

B) Depending on your answer above what are Johns tax consequences?

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