Question
QUESTION 3 C owns 60 shares and D owns 40 shares of Z Corporation, representing all of Zs outstanding shares. C and D are father
QUESTION 3
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C owns 60 shares and D owns 40 shares of Z Corporation, representing all of Zs outstanding shares. C and D are father and son. Z redeems all of Cs stocks. C stays on as Zs president with compensation tied to Zs profits.
a. This redemption is treated as a sale or exchange under 302(b)(3).
b. This redemption is dividend since C has not completed termination in his interest in Z because of the role as president.
c. None of the above.
2 points
QUESTION 4
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C owns 60 shares and D owns 40 shares of Z Corporation, representing all of Zs outstanding shares. Cs stock is entirely redeemed for a note. C is Ds father. D hates C.
a. This is a complete termination of interest under 302(b)(3).
b. This is a complete termination of interest under 302(b)(3) if a family waiver of attribution is obtained.
c. In all court circuits, the family hostility alone may prevent family attribution.
d. B and C.
e. None of the above.
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