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.

Requirement 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 $150,000 cash?