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What gain or loss results to winkler corporation

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Question - Winkler Corporation has 1,000 shares of common stock outstanding owned as follows: Shisong, 500 shares and Iris (an unrelated party), 500 shares. Shisong and Iris each paid $100 per share for the Winkler stock 10 years ago. Winkler distributes land held as an investment (fair market value of $80,000, adjusted basis of $30,000) to Iris in redemption of 250 of her shares.

Required -

a. What are the tax results to Iris on the redemption of her Winkler stock?

b. What gain or loss results to Winkler Corporation on the redemption?

c. Assume that Winklers' s E & P is $170,000 after any required adjustment for the gain or loss on the land distribution but before any required adjustment for the stock redemption. What is the reduction in Winkler Corporation's E & Pas a result of the redemption?

Reference no: EM133187593

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