Nash is one of three equal unrelated shareholders of

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Nash is one of three equal unrelated shareholders of MacLeod Corporation. Nash has held MacLeod stock for four years and has a basis in his stock of $50,000. MacLeod has $300,000 of current and accumulated E&P and distributes $100,000 to Nash.

a. What are the tax consequences to MacLeod and to Nash if Nash is an individual and

the distribution is treated as a dividend?

b. In Part a, what would be the tax consequences if Nash were a corporation?

c. What are the tax consequences to MacLeod and to Nash (an individual) if Nash surrenders all his stock in a redemption qualifying for sale treatment?

d. In Part c, what would be the tax consequences if Nash were a corporation?

e. Which treatment would Nash prefer if Nash were an individual? Which treatment would Nash Corporation prefer? Why?

Reference no: EM13593387

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