I do not understand how the highlighted answers were calculated, please advise.

Score: 308 of 4 pts (similar to) 4 of 10 (5 complete) HW Score: 38 80/0; If Question Missy owns all 100 shares of Sand Corporation stock having a Sl. 15 million FMV. Her basis in the stock is $450,000. Sand's E&P balance is S700,000. 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 S8S0,000 for these assets. Read the Leguirements_ 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 S300,000 cash7 $512,500 of capital gain Missy will recognize $187,500 of capital gain She will recognize an additional on her sale of 75 shares of Sand Corporation stock to Peter on the redemption of her remaining shares by Sand. Peter will take a basis in his stock of s 850,000 on the redemption if the redemption is for cash. If Sand uses property to redeem Sand will recognize Missy's stock it will s 175,000 no gain or loss recognize gain (but not loss) decrease by on the property The corporation's E&P will Requirement b. How would pur answer to Part a change (if at all) if Sand first redeems 25 shares of Missy's stock for S300,000 and then Peter purchases the remaining 75 shares from Missy for S8S0,000? Missy's tax consequences will Peter's tax consequences will be the same. be the same. be the same. Sand's tax consequences will