The gross estate of Raul, decedent who died in 2009, includes 700 who shares of stock of Orange Corporation (basis to Raul of $400,000, fair market value on date of death of $3 million). The estate will occur $2 million of death taxes and funeral and administration expenses, and the adjusted gross estate is $8 million. Denise, Raul's daughter and sole heir of his estate, owns the remaining 300 shares of Orange Corporation's (1,000) shares outstanding. In the current year, Orange (E & P of $4 million) redeems all of the estate's 700 shares for $3 million. What are the tax consequences of the redemption to Raul's estate?