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Luke owns all 400 shares of Rapid Corporation stock. His basis in the stock is $20,000. Rapid has $120,000 of E&P. Rapid redeems 55 of
Luke owns all 400 shares of Rapid Corporation stock. His basis in the stock is $20,000. Rapid has $120,000 of E&P. Rapid redeems 55 of Luke's shares for $82,500. Requirement What are the tax consequences of the redemption to Luke and to Rapid? to be taxed at the applicable rate. His basis in the Luke recognizes a(n) remaining shares is
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