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?