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What are the tax consequences to pam

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Reference no: EM133103944

Question - Comet Company is owned equally by Pat and his sister Pam, each of whom holds 160 shares in the company. Pam wants to reduce her ownership in the company, and it was decided that the company will redeem 80 of her shares for $1,600 per share on December 31, 20X3. Pam's adjusted tax basis in each share is $800. Comet has total E&P of $280,000. What are the tax consequences to Pam because of the stock redemption?

Reference no: EM133103944

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