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Qualified_Stock_redemption_Sec_303

Qualified_Stock_redemption_Sec_303 - Red Corporation(E&...

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Topic: Sec 303: Distributions to pay death taxes (qualified stock redemption) Edward died owning 20% of the total Red Corporation shares outstanding (basis of $600,000), and the Red stock is included in his estate at its date of death value of $1 million. Edward’s adjusted gross estate is $2.5 million, and the death taxes and funeral and administrative expenses total $500,000.
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Unformatted text preview: Red Corporation (E & P of $6 million) distributes land (fair value of $500,000, basis of $340,000) in redemption of one-half of the estate’s stock in the corporation. The estate sells the land five month later for $520,000. Required : What are the tax consequences to Red Corporation and to the estate as a result of the redemption and sale?...
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