3. On 4/15/X2, Frank and seven individuals formed R corporation and each received the following number of shares of R co. voting stock: Frank's Father Frank's Mother Frank Frank's Sister Frank's Grandfather Frank's Cousin Frank's Wife Frank's Unrelated Friend Joe 6,000 3,000 4,000 2,500 4,000 500 2,000 5,500 On 10/16/X7 R co. redeemed 1000 of Frank's shares for $3000, 5000 of his father's shares, 2000 of his mother's shares and 2000 of Joe's shares. Frank's basis in the redeemed shares was $2500. a. Determine how Frank will characterize the $3,000 distribution from R co. b. Determine how Frank will characterize the $3,000 distribution from R co., if instead Rco. had redeemed 1000 of Frank's shares, 3000 of his father's shares, 2000 of his wife's shares and 3000 of Joe's shares