4-2 Redemptions: Tax Consequences to Shareholders. R Corporation, which has substantial E&P, redeems 50 of T's 70 shares (basis of $100 per share) for $60,000. a) What effect does the redemption have on T's taxable income and the basis for his stock, assuming the transaction qualifies as a sale? b) What effect does the redemption have on T's taxable income and the basis for his stock, assuming the distribution does not qualify for sale treatment 4-11 Redemptions: 302(b)(2). Z Corporation has 1,000 shares of stock outstanding owned as follows A B C. D Shareholder Shares Owned Adjusted Basis 100 $10,000 100 10,000 200 20,000 600 60,000 1,000 All shareholders paid $100 per share for their stock. Z has substantial earnings and profits. a) During the year, the corporation redeemed 400 shares of D's stock for $400,000. What is the effect of the redemption on D? b) Same as (a) except the corporation redeemed 200 shares of D's stock for $200,000 4-14 Family Attribution. Ms. B owns 30% of the stock of F Corporation. The remaining 70% of the stock is owned by the members of her family. Indicate whether Ms. B would be treated as constructively owning the stock owned by the following individuals under the family attribution rules of 318. a) Her father b) Her daughter c) Her sister d) Her grandfather e) Her grandson f) Her father-in-law g) Her son-in-law h) Her uncle