Peartree, Inc. is a calendar year C corporation, doing business in the United States, which has developed some ground breaking highly sophisticated accounting tax software. H & R Block, an existing U.S. corporation wants to break into the accounting software business to complement its current tax software business. H & R Block has determined that the best way to get into the accounting software business is to acquire the software from Peartree. Peartree's shareholders indicate that they would entertain a proposal to sell their stock, but would reject any proposal to sell individual assets. Peartree has four stockholders, each of whom holds a 25% interest and files a federal income tax return as married filing joint. Braden acquired his shares directly from the company at the time it was formed six years ago (2015) for a total purchase price of $1,000. Braden is aware of Internal Code Section 1202 because he used it to reduce his gain on the sale of stock in a different corporation three years ago, and has passed this information on to the other stockholders. Evan acquired his shares three years ago when he bought out another member of the company (Naghmeh) at a total purchase price of $2.6 Million. Elyse is not an original shareholder. She inherited her stock from her father when he died four years ago. Her father acquired his shares at the time the company was initially formed for a total purchase price of $1,000. The fair market value of the shares on the date of death of Elyse's father was $450,000. Micah was also an original founding shareholder acquiring her 25% interest for a total investment of $1,000, but has since renounced her U.S. citizenship, to become both a citizen and resident of France. Each of the four shareholders would seriously like to avoid paying any federal income tax on the 12 Million Dollars of sales proceeds each of them will individually receive upon the sale of their 25% interest to H & R Block. They seek your advice on the application of Internal Revenue Code Section 1202 to their circumstances. How much gain or loss will each of them be required to report on their individual income tax return for the year of sale (2021). Note: I am not asking you to make a tax calculation. I am asking you to compute the amount of gain or loss that should be reported.

a) (10 Points). Braden's gain or loss?

b) (10 Points). Evan's gain or loss?

c) (10 Points). Elyse's gain or loss?

d) (10 Points). Micah's gain or loss?