6. Moon Corporation (E&P of $700,000) has 4,000 shares of common stock outstanding. The shares are owned as follows:

Andy 2,000 shares

Darlene (Andys daughter) 1,500 shares

Wendy (Andys aunt) 500 shares

In the current year, Moon redeems all of Andys shares. Determine whether the redemption can qualify for sale or exchange treatment under the complete termination of a shareholders interest rules in each of the following independent circumstances. Assume that in a. d Andy completes and submits the appropriate waiver.

a. Andy remains as a director of Moon Corporation.

b. Three years after the redemption, Andy loans $100,000 to Moon Corporation and receives in return a two-year note receivable.

c. Darlene replaces Andy as president of Moon Corporation.

d. Six years after the redemption, Andy receives 250 shares in Moon as a gift from Wendy.

Assume that Andy is not related to Darlene or Wendy. How would you answers to a d change (discuss your answers in a1 to e1 below).

a1. Andy remains as a director of Moon Corporation.

b1. Three years after the redemption, Andy loans $100,000 to Moon Corporation and receives in return a two-year note receivable.

c1. Darlene replaces Andy as president of Moon Corporation.

d1. Six years after the redemption, Andy receives 250 shares in Moon as a gift from Wendy.