FAMCO is owned by Jerry, and has 3 shareholders. Jerry owns 40 of 60 shares of Famco stock, his daughter Megan owns 10 shares and his son Sean 10 shares. Jerrys owns 2/3 (40 of 60) of shares with a tax basis in his shares of $450,000 before the distribution. Jerry redeems 20 of his shares for $2 million that the corporation distributes as $400,000 cash to Jerry, immediately, and issue a note for $1.6 Million that will pay $400,000 each year beginning in 2021 and continuing through 2024. The note will also pay 3% interest. the redemption of the 20 shares reduces Jerrys ownership from 66.67% to 50%. Both Megan and Sean shares go from 16.67% to 25%. Will this redemption be treated as an exchange or as a distribution for each? What will be the tax results for Jerry? Megan? Sean? FAMCO?