Since garnet corporation was formed five years ago, its stock has been held as follows: 525 shares by Frank and 175 shares by Grace. Their basis in the stock is 350,000 for frank and and 150,000 for Grace. As part of a stock redemptions Garnet redemmed 125 of Franks Shares for 175,000 and 125 of Graces shares for 175,000.

a) what are the tax consiquences

b) HOw would the Tax consiquences be different for frank and grace be different in instead of the redemption, they each sold 125 shares to Chuck(unrelated party)

c) What facrors should influence their decision on whether to redeem or sell the 250 shares of stock ?