Jamestown, Inc. is family-owned C-corporation whose stock is not traded on an exchange. Jamestown, Inc. stock is owned as follows:

• Virginia 6,000 shares

• Miles 8,000 shares

• John 2,000 shares

• Hope 4,000 shares

• Z corporation 3,000 shares

• VM partnership 2,000 shares

• Total shares issued & outstanding 25,000 shares

Virginia would like to redeem 3,000 shares of her stock. The stock has a fair market value of $500,000 and Virginia has a basis of $150/share for her stock. Here are the relationships Virginia has with the other shareholders of Jamestown, Inc.:

• Miles is Virginias older brother

• John is Virginias father

• Hope is Virginias sister

• Virginia owns 60% of the stock of Z corporation

• Virginia has a partnership interest of 30% in VM partnership.

1. Assume that Virginia is in the 37% tax bracket. How much tax would Virginia owe if the transaction above (i.e. the redemption of 3,000 share of her Jamestown stock) occurs?