reviewinWindow.html eBook Exercise 19-28 (LO. 8) During the current year, Gnatcatcher, Inc. (E & P of $1,000,000), distributed $200,000 each to Brandi and Yuen in reder their Gnatcatcher stock. The two shareholders acquired their shares five years ago. Each shareholder is in the 32% tax had a $45,000 basis in the redeemed stock. Assume taxpayers in the 32% tax bracket are subject to the long-term cap qualified dividends tax rate of 15%. a. Assume that the distribution to Brandi is a qualifying stock redemption. The distribution is taxed as a sale Dhade and Brandi's tax liability on the distribution is $ 23,250 Feedback Check My Work Under $ 317(b), a stock redemption occurs when a corporation acquires its stock from a shareholder in exchange Code does allow sale or exchange treatment for certain kinds of stock redemptions. In these transactions, as a ger ownership interest is diminished as a result of the redemption. Post-Submission Answers: sale or exchange; $23,250. Noncorporate hareholders generally prefer to have a stock redemption treated as a sale or exchange rather than a individual taxpayers, the tax rate for long-term capital gains and qualified dividend income is o 15, or 20 percent a marginal tax bracket. Also, the 3.8 perdent additional tam orien investment income of certain high-income taxpave dividend income. The preference for qualifying stock redemption treatment is based on the fact that such transactio recovery of the neeme ser