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Discuss the advantages and disadvantages of redeeming the stock of a major shareholder in a closely-held or family-owned business to the shareholder and the corporation.

Discuss the advantages and disadvantages of redeeming the stock of a major shareholder in a closely-held or family-owned business to the shareholder and the corporation. Specifically, address the treatment of the amounts received by the shareholder, for example, whether it is a Section 301 distribution or a redemption of stock (capital gain/loss treatment). Also, address the constructive ownership rules of Section 318. Further, discuss the tax effects to the redeeming corporation.

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