Carter Corporation had earnings and profits of $220,000 on January 1, 2023. Its two shareholders were Georgia and Ray. Georgia owned 120 shares which she purchased in 2017 for $90,000. Ray owned 80 shares which he purchased in 2018 for $65,000. On January 1, 2023, the corporation redeemed 80 of Georgia's shares and paid her $100,000 in cash. 1. Did this redemption qualify as a sale? 2. How much income did Georgia recognize on the redemption? 3. What is the type of income that Georgia recognized? 4. What is Carter Corporation's earnings and profits immediately following the redemption? 1. This redemption did not qualify as a sale because of Code Sec. 318 attribution Georgia owns 100 percent before and after the redemption. 2. Georgia recognized $100,000 on the redemption since the amount of distribution exceeded the shareholder's basis in the redeemed stock. 3. Georgia will recognize Dividend Income 4. Carter Corporation's earnings and profits following the redemption are