$4-52$ Various Redemption Issues. Alice, Bob, Carol, the ABC Partnership, Franklin Corporation,

and the Gleason Family Trust own shares of Holston Corporation's single class of stock as

follows:

The Holston shareholders have owned their shares for more than one year. The partners

of the ABC Partnership have the following interests in the partnership: Alice $40\%,$ Bob

$30\%,$ and Carol $30\%.$ The shareholders of Franklin Corporation own shares as follows:

Alice $10\%,$ Bob $60\%,$ and Carol $30\%.$ The equal beneficiaries of the Gleason Family

Trust are David $($Alice$\text{'}$s grandson$)$ and Edgar $($Bob$\text{'}$s grandson$).$ Alice is considering hav$-$

ing Holston redeem some of her Holston shares in exchange for cash. On the day of the

planned redemption, Holston will have $$25,000$ of current E&P and $$75,000$ of prior

accumulated E&P$.$ Determine the tax consequences of the following two independent

transactions to Alice and Holston Corporation.

a$.$ Holston redeems $100$ shares of its stock from Alice in exchange for $$80,000.$

b$.$ Holston redeems $200$ shares of its stock from Alice in exchange for $$160,000.$