Missy owns all 100 shares of Sand Corporation stock having a $1.15 million FMV. Her basis in the stock is $450,000. Sand?'s ?E&P balance is $700,000. 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 $850,000 for these assets.

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 $300,000 ?cash?

Requirement a. What are the tax consequences to Missy, Peter, and Sand if Peter purchases 75 shares of Sand slook for $850,000 and Sand redeems Missy's remaining 25 shares for $300,000 cash? Missy will recognize of v on her sale of 75 shares of Sand Corporation stock to Peler. She will recognize an. acdilional of on he redemption of her remaining shares by Sand