CoursHeroTranscribedText: Problem 13-36 (c) (LO. 1, 7) Trey is in the 32% tax bracket. He acquired 4,000 shares of stock in Midlands Corporation ten years ago at a cost of $80 per share. In the current year, Trey received a payment of $175,000 from Midlands Corporation in exchange for 1,200 of his shares in Midlands. Midlands has E & P of $160,000. Trey has a capital loss carryover of $50,000 in the current tax year. Assume that Trey has no capital losses and taxpayers in the 32% tax bracket are subject to the long-term capital gains and qualied dividends tax rate of 15%. What amount of the capital loss may Trey deduct in the current year in the following situations? a. The $175,000 payment from Midlands Corporation is a qualifying stock redemption for tax purposes. Trey may use Q of the capital loss carryover to offset the gain on the redemption. His income tax liability is E - b. The $175,000 payment from Midlands Corporation does not qualify as a stock redemption for tax purposes. Trey could deduct 2- 222,000 of the $50,000 capital loss carryover: His income tax liability is C . c. If Trey had the flexibility to structure the transaction as described, which form would he choose to receive the greatest tax benefit? I vi