Pennypincher Corporation has 1,500 shares of stock outstanding owned by the following taxpayers Shareholder Shares Owned Mr.
Question:
Pennypincher Corporation has 1,500 shares of stock outstanding owned by the following taxpayers
Shareholder | Shares Owned |
Mr. Penny | 500 |
Mrs. Penny (Mr. Penny's wife) | 240 |
John (they Penny's son) | 180 |
Buddy Penny (Mr. Penny's brother) | 200 |
P & P Partnership (Mr. Penny is a 20% partner) | 100 |
PPP Corporation (Mr. Penny is a 30% shareholder) | 280 |
a) Determine Mr Penny's stocks owned for purposes of the Internal Revenue Code Section 302(b)(2)) redemption provision?
b) Determine the stocks owned by the PPP Corporation for purposes of the Internal Revenue Code Section 302(b)(2) provision?
c) Under what conditions can Mrs Penny get redemption treatment under Internal Revenue Code Section 302(b)(3) for the redemption of the 10 share actually owned?
Financial Accounting
ISBN: 978-0324645576
10th edition
Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice