Staton Inc . , has four unrelated shareholders , Wayne , Judy , Erica , and Josh . Their respective bases in the shares are $15, 000, $17, 000, $19, 000 and $21 , 000 . Each shareholder owns 100 shares of Staton . On November 8 , 2013 , Staton Inc . redeemed 50 shares of Wayne's stock for $10, 000 and 20 shares of Judy's stock for $4 , 000 . Staton's current E&P for 2013 was $30, 000 . What are the tax consequences to Wayne and Judy