Problem 19-55 (LO. 8, 9) Robert and Lori (Robert's sister) own all of the stock in Swan Corporation (E &P of $1,000,000). Each owns 500 shares and has a basis of $85,000 in the hares Robert wants to sell his stock for $600,000, the fair market value, but he will continue to be employed as an officer of Swan Corporation after the sale. Lori would like to purchase Robert's shares and, thus, become the sole shareholder in Swan, but Lori is short of funds. What are the tax consequences to Robert, Lori, and Swan Corporation under the following circumstances a. Swan Corporation distributes cash of $600,000 to Lori, and she uses the cash to purchase Robert's shares Lori would have dividend income of and a basis of in the newly acquired 500 shares and become the sole shareholder of Swan. Robert would have a capital gain of on the sale. The stock transaction A redemption that terminates a shareholder's entire stock ownership in a corporation qualifies for sale or exchange treatment under $ 302(b)(3) The attribution rules generally apply in determining whether the shareholder's stock ownership has been completely terminated. b. Swan C ration redeems all of Robert's shares for $600,000 The transaction would r 515,000 to