Solution-Explaining the consequences to the corporation

Explaining the consequences to the corporation

Reference no: EM132909395

Question - Please write a letter to your client in your own words explaining the consequences to the Corporation AND to the shareholder.

Sunergos Corporation wants to transfer cash of $150,000 or property of $150,000 to one of its main shareholders, Susan, in a redemption transaction that is a qualified stock redemption. Susan owns 1,000 shares of stock with a basis of $50,000 and FMV of $150,000. The company has two assets, each worth $150,000 that are no longer needed in the business. Property 1-basis of $75,000 and Property 2-basis of $195,000. So you are asked to research and answer what are the consequences to the company if they redeem the $150,000 in each of the following: a. cash, b. Property 1 and c. Property 2. Also, explain the tax consequences for Susan the shareholder as well.

Reference no: EM132909395

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Explaining the consequences to the corporation

Reference no: EM132909395

Reference no: EM132909395

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