Viking Corporation is owned equally by Sven and his wife Olga, each of whom hold 100 shares in the company. Viking redeemed 80 shares of Sven's stock for $2,300 per share on December 31, 20X3. Viking has total E&P of $530,000. What are the tax consequences to Viking because of the stock redemption?

Multiple Choice

• A reduction of $184,000 in E&P because of the exchange.

• A reduction of $424,000 in E&P because of the exchange.

• A reduction of $212,000 in E&P because of the exchange.

• No reduction in E&P because of the exchange.