Julio is in the 33% tax bracket. He acquired 2,000 shares of stock in Gray Corporation seven years ago at a cost of $50 per share. In the current year, Julio received a payment of $150,000 from Gray Corporation in exchange for 1,000 of his shares in Gray. Gray has E & P of $1 million. What tax liability would Julio incur on the payment in each of the following situations? Assume that Julio has no capital losses.

a. The stock redemption qualifies for sale or exchange treatment. b. The stock redemption does not qualify for sale or exchange treatment.

c.How would your answer to Problem 34 differif Julio were a corporate shareholder (in the 34% tax bracket) rather than an individual shareholder and the stock ownership in Gray Corporation represented a 25% interes