44 Salkey Company has two owners, Gus and Jack, who are father and son Gus owns 100 shares which he acquired in 2008 for $15,000 Jack owns 100 shares which he acquired in 2010 for $21,000 Salkeys current E P in 2015 is $70,000 On March 18, 2015, Salkey redeemed 35 shares from Gus in return for land worth $50,000 and an adjusted basis of $10,000 a Does the redemption qualify as a sale b What are the income tax consequences to Gus, Jack, and Salkey Company c Would your answers to a and b differ if Gus and Jack were brothers If so, how

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44  Salkey Company has two owners, Gus and Jack, who are father and son  Gus owns 100 shares which he acquired in 2008 for $15,000  Jack owns 100 shares which he acquired in 2010 for $21,000  Salkeys current E P in 2015 is $70,000  On March 18, 2015, Salkey redeemed 35 shares from Gus in return for land worth $50,000 and an adjusted basis of $10,000  a  Does the redemption qualify as a sale  b  What are the income tax consequences to Gus, Jack, and Salkey Company  c  Would your answers to a and b differ if Gus and Jack were brothers  If so, how

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44. Salkey Company has two owners, Gus and Jack, who are father and son. Gus owns 100 shares which he acquired in 2008 for $15,000.

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