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Barb owns all 100 shares of Lattice Corporation stock having a $ 0.85 million FMV. Her basis in the stock is $ 450000. Lattice's E&P

Barb owns all 100 shares of Lattice Corporation stock having a $ 0.85 million FMV. Her basis in the stock is $ 450000. Lattice's E&P balance is $ 400000. Nick would like to purchase the stock but wants only the corporation's non-cash assets valued at $ 700000. Nick is willing to pay $ 700000 for these assets.

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a. What are the tax consequences to Barb, Nick, and Lattice if Nick purchases 75 shares of Lattice stock for $700,000 and Lattice redeems Barb's remaining 25 shares for $150,000cash?

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