ABC Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Josh (550 shares) and Steve (450 shares), who are unrelated individuals. ABC redeems 75 of Joshs shares for $1,000 per share. Josh paid $50 per share for his ABC stock nine years ago.

1) Is this a qualified redemption? Why?

2) What is Joshs realized gain/ loss? What is Joshs recognized gain/ loss? What is the character of the recognized gain/ loss?