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What are the results to the parties

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X Corp. is owned entirely by two individuals, Erin and Benson (who were unrelated unless stated otherwise). Erin owns 60 shares of X common stock (bought in one transaction for $600). Benson owns 40 shares of X common stock (with a basis of $30 per share). The stock's fair market value is $20 per share. X's E&P is $500; X Corp. uses the accrual method of accounting.

Question 1: What are the results to the parties from the alternative transactions below (i.e., the amount and character of shareholder income or loss and E&P impact)?

Question 2: Erin sells 10 X shares to Benson for $200. Alternatively, what should Erin do if she owns 50 shares with a $10 per share basis and 10 shares with a $20 per share basis?

Reference no: EM132466220

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