A. MDC Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Jeff (550 shares) and Thomas (450 shares), who are unrelated individuals. Bell redeems 450 of Jeff’s shares for $1,000 per share. Jeff paid $600 per share for his Bell stock nine years ago. This is a qualified redemption. What is Jeff’s realized gain/ loss? What is his recognized gain/ loss? What is the character of the recognized gain/ loss? 

B. See the above problem: Assume this is a taxable event and not a qualified redemption: What is Jeff’s realized gain/ loss? What is his recognized gain/ loss? What is the character of the recognized gain/ loss?

Answer rating: 100% (QA)

So first case nontaxable event Jeff purchased 550 shares of MDC at 600sh... View the full answer