USA, 2021

52) Brett, a 50% owner of Atlas Corporation's common stock, receives a distribution of a new class of Atlas preferred stock having a $40,000 FMV Bret's basis in the Atlas common stock is $30.000 its FMV is $80,000 on the distribution date One year later the corporation redeems the preferred stock for $75,000 A the time the stock was issued the corporation's current and accumulated E8P was 580 000. At the end of the year of redemption the current and accumulated E&P is $25,000. No other distributions out of E&P were made in the year of redemption What are the tax consequences of the transaction? 52) Brett, a 50% owner of Atlas Corporation's common stock, receives a distribution of a new class of Atlas preferred stock having a $40,000 FMV Bret's basis in the Atlas common stock is $30.000 its FMV is $80,000 on the distribution date One year later the corporation redeems the preferred stock for $75,000 A the time the stock was issued the corporation's current and accumulated E8P was 580 000. At the end of the year of redemption the current and accumulated E&P is $25,000. No other distributions out of E&P were made in the year of redemption What are the tax consequences of the transaction