Red Corporation is owned entirely by Alex and Betty (who are unrelated unless otherwise stated). Alex owns 60 shares of Red Corporation's common stock (bought in one transaction for $600). Betty owns 40 shares of Red Corporation's common stock (with an adjusted basis of $30 per share). The stock's FMV is $20 per share. Red Corporation's E&P is $500.Red Corporation uses the accrual method of accounting. What are the results to the parties from the alternative transactions in each of the following situations? Provide the amount and character of shareholder income or loss and the impact on Red Corporation's E&P.

d.What would result to Betty if Red redeems 10 of Betty's shares for $200? What is the minimum number of shares that Betty must have redeemed to ensure sale or exchange treatment?