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.

h.Alex sells 30 shares back to Red for $600. What would result if Alex and Betty are "related" in the following alternative ways:

I.Betty is Alex's brother and their father is living

II.Betty is Alex's equal partner in a two-person partnership. What if the partnership owns an option to purchase Betty's shares in Red?

III.Betty is a corporation in which Alex owns one half of the stock