Carmela owns 80 shares of the common stock of X Corp., which has 100 shares of common stock outstanding. X Corp. owns 65 shares of common stock of Y Corp., which has 100 shares outstanding. Carmela sells 35 shares of X Corp. stock to Y Corp. for $100 per share. Assume that Carmela has a basis of $25 per share in the X Corp. stock and that X Corp. has $4,000 and Y Corp. has $6,000 of accumulated earnings and profits. What are the tax consequences to Carmela?

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Formula Snip Tax consequences to Carmela Carmela on the selling of 35 shares to Y ... View the full answer