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Score: 3.08 of 4 pts 4 of 10 (5 complete) HW Score: 38.8%, 15 %x PC:4-57 (similar to) Question Missy owns all 100 shares of Sand Corporation stock having a $1.15 million FMV. Her basis in the stock is $450,000. Sand's E&P balance is $700,000. Peter would like to purchase the stock but wants only the corporation's non-cash assets valued at $850,000. Peter is willing to pay $850,000 for these assets. Read the requirements Requirement a. What are the tax consequences to Missy, Peter, and Sand if Peter purchases 75 shares of Sand stock for $850,000 and Sand redeems Missy's remaining 25 shares for $300,000 cash? Missy will recognize $ 512,500 of capital gain on her sale of 75 shares of Sand Corporation stock to Peter. She will recognize an additional $187,500 of capital gain on the redemption of her remaining shares by Sand. Peter will take a basis in his stock of $ 850,000 Sand will recognize Missy's stock it will $175,000 no gain or loss on the redemption if the redemption is for cash. If Sand uses property to redeem recognize gain (but not loss) on the property. The corporation's E&P will decrease by Requirement b. How would your answer to Part a change (if at all) if Sand first redeems 25 shares of Missy's stock for $300,000 and then Peter purchases the remaining 75 shares from Missy for $850,000? be the same Missy's tax consequences will Peter's tax consequences will be the same be the same Sand's tax consequences will