Flintstone company is owned equally by Fred stone and his sister Wilma, each of whom hold 2800 shares in the company. Wilm wants to reduce her ownership in the company and it was decided that the company would redeem 595 of her shares for $27,100 per share on December 31 of this year. Wilmas income tax basis and each share is $9700. Once done his current EMP of $10,220,000 and accumulating EMP of $15,120,000

1) what is the amount in character recognize by Wilma as a result of the stock redemption, assuming only the substantially disproportionate with respect to the shareholder test is applied?

2) What is Welmas income tax basis in the remaining 2205 shares she owns in the company?