Hendrix Corporation (with E&P pf $650,000) has 10,000 shares of common stock outstanding. Casey owns 3,500 shares with a basis of $17,500. Casey's granddaughter owns 800 shares, Casey's father owns 1,000 shares, and Casey's niece owns 2,900 shares. In addition, Marsh Corporation owns 1,400 shares. Casey owns 90% of the stock in Marsh Corporation. On March 5, Hendrix Corporation redeems 3,100 shares from Casey for $27,900. On April 10, Hendrix Corporation redeems all 2,900 shares from Casey’s niece. Please discuss the proper tax treatment of the March 5 redemption of the shares from Casey.