During the current tax year, Holly and Kristin, business partners and best friends, owned 30% and 70% of Photo Corporation's outstanding 100 shares of common stock, respectively. On December 31st, Holly sold all her shares back to Photo for $30,000, while Kristin sold 60 shares to Photo for $60,000. At the time of the stock sale, Holly and Kristin had a long-term holding period and basis in their shares sold to Photo of $10,000 and $18,000, respectively. Assuming that Photo's available E&P was $0, and no contraction of a qualified trade or business occurred, what amount and character of gains/losses/income do Holly, Kristin, and Photo recognize?

Answer rating: 100% (QA)

To determine the amount and character of gains losses or income recognized by Holly Kristin and Phot... View the full answer