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4 - 2 Redemptions: Tax Consequences to Shareholders. R Corporation, which has sub - stantial E&P , redeems 5 0 of Ts 7 0 shares
Redemptions: Tax Consequences to Shareholders. R Corporation, which has substantial E&P redeems of Ts shares basis of $ per share for $
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?
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