$4-2$ Redemptions: Tax Consequences to Shareholders. R Corporation, which has sub$-$stantial E&P$,$ redeems $50$ of Ts $70$ shares $($basis of $$100$ per share$)$ for $$60,000.$

a$.$ What effect does the redemption have on Ts taxable income and the basis for his stock, assuming the transaction qualifies as a sale?

b$.$ What effect does the redemption have on Ts taxable income and the basis for his stock, assuming the distribution does not qualify for sale treatment?