John died on March 3. His gross estate of $2.5 million includes First Corporation stock (400 of

Question:

John died on March 3. His gross estate of $2.5 million includes First stock (400 of the 1,000 outstanding shares) worth $1.5 million. John’s wife, Myra, owns the remaining 600 shares. Deductible funeral and administrative expenses total $250,000. John, Jr. is the sole beneficiary of John’s estate. Estate taxes amount to $350,000.
a. Does a redemption of First stock from John’s estate, John, Jr., or John’s wife qualify for sale treatment under Sec. 303?
b. On September 10, First redeems 200 shares of its stock from John’s estate for $800,000. How does the estate treat this redemption for tax purposes? Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...