Amy, Beth, Meg each own 100 of the 300 outstanding shares of Theta Corporation stock. Amy wants to sell her shares, which have a $40,000 basis and a $100,000 FMV. Either Beth and/or Meg can purchase Amy's shares (50 shares each) or Theta can redeem all of them. Theta has a $150,000 E&P balance.

Required: write a memoransum comparing the tax consequences of the two options to the three sisters, who activel manage Theta.