What are the tax consequences to Shonda

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Problem - Shonda owns 1,000 of the 1,500 shares outstanding in Rook Corporatio (E & P of $1,000,000). Shonda paid $50 per share for the stock seven years ago. The remaining stock in Rook is owned by unrelated individuals. What are the tax consequences to Shonda in the following independent situations?

Required -

a. Rook Corporation redeems 450 shares of Shonda's stock for $225,000.

b. Rook Corporation redeems 600 shares of Shonda's stock for $300,000.

Reference no: EM132646755

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