LO.1 Magpie Corporation has 3,000 shares of common stock outstanding. Josephina owns 800 shares, Josephina’s daughter owns 500 shares, Josephina’s brother owns 800 shares, Tern Corporation owns 600 shares, and Petrel Partnership owns 300 shares. Josephina owns 45% of the stock of Tern Corporation, and she owns a 60% interest in Petrel Partnership.

a. Applying the § 318 stock attribution rules, how many shares does Josephina own in Magpie Corporation?

b. Assume that Josephina owns 75% of the stock of Tern Corporation. How many shares does Josephina own, directly and indirectly, in Magpie Corporation?