A corporation is owned equally by Mark and his sister Pat, each of whom hold 100 shares in the company. The corporation redeems 50 of Pat's shares on December 31, 2021, for $1,000 per share in a transaction that Pat treats as an exchange for tax purposes. The corporation has total E&P of $100,000 on December 31, 2021. 

What is the reduction in E&P due to the stock redemption?

Answer rating: 100% (QA)

The reduction in EP due to the stock redemption can be calculated as follows First we need to determ... View the full answer