Thus under the 318 attribution rules John is deemed to own 1000 shares 700

Thus under the 318 attribution rules john is deemed

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400 shares). Thus, under the§ 318 attribution rules, John is deemed to own 1,000 shares (700 shares directly + 300 shares indirectly) in Coffee Corporation.Problems 11. Steve has a capital loss carryover in the current year of $30,000. He owns 3,000 shares of stock in Carmine Corporation, which he purchased six years ago for $20 per share. In the current year, Carmine Corporation (E & P of $750,000) redeems all of his shares for $140,000. Steve is in the 35% tax bracket. What is his income tax liability with respect to the corporate distribution if:a.The redemption qualifies for sale or exchange treatment, and Steve has no other transactions in the current year involving capital assets?b.The redemption does not qualify for sale or exchange treatment? 12. Raul’s gross estate includes 1,500 shares of stock of Orange Corporation (basis to Raul of $600,000, fair market value on date of death of $4.1 million). The estate will incur $2.2 million of death taxes and funeral and administration expenses, and the adjusted gross estate is $9 million. Denise, Raul’s daughter and sole heir of his estate, owns the remaining 500 shares of Orange Corporation’s shares outstanding. In the current year, Orange (E&P of $5 million) redeems all of the estate’s 1,500 shares for $4.1 million. What are the tax consequences of the redemption to Raul’s estate?
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