Joe Tucker is the sole shareholder of Tucker Parts Inc. The corporation is cash rich, and Joe wishes to sell his stock to Bill Corker, who has limited funds. The parties proceed as follows:

a. Joe sells 40 percent of his stock to Bill for $50,000, payable over 10 years.

b. Tucker Parts redeems the remaining 60 percent of Joe's stock for $75,000 in cash.

What are the tax consequences to Joe?

Does it make any difference if the two steps are reversed?

(See Zenz v. Quinlivan, 54-2 ustc 99445, 213 F2d 914 (CA-6 1954); Rev. Rul. 55-

745, 1955-2 CB 223.)