Parsons Inc. is owned equally by Claudette and James Parsons. They each own 1,000 shares of stock.Claudette would like to redeem 500 shares of stock for $50,000 per share. The company's current E&P is$8,000,000 and accumulated E&P is $40,000,000. Claudette's basis in the stock is $10,000 per share.One slight problem in all of this is that Claudette and James have separated (although not legally) andthey refuse to speak to each other or communicate other than through their attorney and you, theiraccountant. 

Claudette would like to know how the redemption will be treated for tax purposes, including herremaining basis in the other 500 shares of stock. You mentioned to her that the family attribution rulesmay play a role in the tax treatment, but shethinks that should not count because she does not considerherself to be James' wife anymore. Please provide her with answers to these questions based on yourresearch and analysis of primary authorities.