Indigo Corporation wants to transfer cash of $$402,200$ or property worth $$402,200$ to one of its shareholders, Brianna, in a redemption

transaction that will be treated as a qualifying stock redemption. If Indigo distributes property, the corporation will choose between two

assets that are each worth $$402,200$ and are no longer needed in its business: Property A $($basis of $$201,100)$ and Property B $($basis of

$$522,860$

a$.$ Compute Indigo's recognized gain or loss if it distributes Property A in redemption of Brianna's shares.

The distribution of Property A would result in a realized

$$ of $

to Indigo, of which $

is

recognized.

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There are also several tax issues surrounding the redeeming corporation that must be addressed, including the recognition of gain or loss on

property distributed pursuant to a redemption, the effect on a corporation's E & P from a distribution that is a qualifying stock redemption, and the

deductibility of expenditures incurred in connection with a redemption.

b$.$ Compute Indigo's recognized gain or loss if it distributes Property B in redemption of Brianna's shares.

The distribution of Property B would result in a realized

$$ of $

to Indigo, of which $

is

recognized.