Carol, Bonnie, and Ann, sisters, own 30 shares, 30 shares, and 40 shares, respectively, in Teal...

 

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Carol, Bonnie, and Ann, sisters, own 30 shares, 30 shares, and 40 shares, respectively, in Teal Corporation (E & P $500,000). Teal Corporation redeems all of Ann's stock for $100,000. Ann paid $200 a share for the stock five years ago. Ann continued to be employed as the treasurer of Teal after the redemption. With respect to the redemption, what are the tax consequences to Ann? Carol, Bonnie, and Ann, sisters, own 30 shares, 30 shares, and 40 shares, respectively, in Teal Corporation (E & P $500,000). Teal Corporation redeems all of Ann's stock for $100,000. Ann paid $200 a share for the stock five years ago. Ann continued to be employed as the treasurer of Teal after the redemption. With respect to the redemption, what are the tax consequences to Ann?

Answer rating: 100% (QA)

The redemption of Anns stock by Teal Corporation will have tax consequences for Ann The tax consequences will depend on the specific tax rules and reg... View the full answer