Catelyn Stark owns 85% of Winterfell Corporation. Winterfell has a class of stock issued and outstanding.Catelyn is the President of Winterfell and is also the chair of the board of directors.The other three board members are her three adult children, Sansa, Arya and Bran each of whom own 5% of Winterfell.The children's stock was given by Catelyn over a period of five years as the children were born.Each child is at least 20 years old.Catelyn decided in 2018 that she wanted to retire and transfer the management and control of Winterfell to her children.You advised Catelyn to make a gift of some of the Winterfell stock to each child in late November 2018.In early December 2018 Catelyn, under your advice, had Winterfell redeem her remaining shares of Winterfell for cash and a promissory note.The redemption price was determined by an independent, third party appraiser.The note will be paid in monthly installments of principal and interest that began in January 2019.The interest rate on the note is within market rates.

1. Why did you advise Catelyn to give each child some stock?
2. Does the redemption, taking into consideration only the facts stated above (do not make any assumptions), qualify for long-term capital gain (LTCG) treatment for Margaret?Be explicit and explain why or why not.

Is there anything else about these transactions that you could have advised Catelyn to do to be certain that the redemption qualifies?