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What are the tax consequences to Missy

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Question - Missy owns all 100 shares of Sand Corporation stock having a $1.15 million FMV. Her basis in the stock is $450,000. Sand's E&P balance is $700,000. Peter would like to purchase the stock but wants only the corporation's non-cash assets valued at $850,000. Peter is willing to pay $850,000 for these assets. What are the tax consequences to Missy, Peter, and Sand if Peter purchases 75 shares of Sand stock for $850,000 and Sand redeems Missy's remaining 25 shares for $300,000 cash?

Reference no: EM132883679

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