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ACCT TAX Falzone Company has two shareholders, Rita and Sal Corporation. Rita acquired her 300 shares in 2010 for $30,000 and Sal Corporation acquired its
ACCT TAX
Falzone Company has two shareholders, Rita and Sal Corporation. Rita acquired her 300 shares in 2010 for $30,000 and Sal Corporation acquired its 200 shares in 2006 for $15,000. On August 2, 2018, Falzone Company sold one of its businesses that it had held since 2006. Due to this sale, Falzone Company redeemed 50 shares from each shareholder in exchange for $20,000 each. Falzone's E&P at the time of the redemption was $250,000. What are the tax consequences of this transaction to Rita and Sal Corporation
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