The C Corp is valued at $960,000 and the private equity firm is paying $1,000,000 in cash. The share holders don't want to receive cash and are remaining in the company as employees. The buyer is giving the shareholders stock options of 60 at a price of $3,000 each ($180,000) instead of cash. What are the tax implications for the buyer and for the C Corp and it's shareholders. There's currently 320 shares valued at $3,000 each.