Various Redemption Issues. Alice, Bob, Carol, the ABC Partnership, Franklin Corporation, and the Gleason Family Trust own shares of Holston Corporations single class of stock as follows:

Shareholder Shares Held Adjusted Basis

Alice 300 $ 75,000

Bob (Alices brother) 500 125,000

Carol (Alices daughter) 100 25,000

ABC Partnership 200 50,000

Franklin Corporation 600 150,000

Gleason Family Trust 300 75,000

Total 2,000

The Holston shareholders have owned their shares for more than one year. The partners of the ABC Partnership have the following interests in the partnership: Alice 40%, Bob 30%, and Carol 30%. The shareholders of Franklin Corporation own shares as follows: Alice 10%, Bob 60%, and Carol 30%. The equal beneficiaries of the Gleason Family Trust are David (Alices grandson) and Edgar (Bobs grandson). Alice is considering having Holston redeem some of her Holston shares in exchange for cash. On the day of the planned redemption, Holston will have $25,000 of current E&P and $75,000 of prior accumulated E&P. Determine the tax consequences of the following two independent transactions to Alice and Holston Corporation. a. Holston redeems 100 shares of its stock from Alice in exchange for $80,000. b. Holston redeems 200 shares of its stock from Alice in exchange for $160,000.