Retrieved from https://www.vitalsource.com/ Tammy and Barry formed Pheasant Corporation several years ago in a transaction that qualified under $ 351. Both shareholders serve as officers and on the board of directors of Pheasant. In the current year, Pheasant Corporation redeemed all of Barry's shares in the corporation with a property distribution. 1. What are the tax issues for Barry and Pheasant? As outlined in the textbook, effective tax planning with respect to transfer of property in corporations is determining whether adhering to $ 351 or avoiding it would yield the preferred tax result. In addition, the text also explains when carryover basis applies when transferring property. Applying the text learnings from this week's reading, Pheasant's redemption of Barry's shares would be treated as a sale. With that in mind, Pheasant will have to realize a gain or loss if it redeems the property as stock redemption. This could have significant impacts to Pheasant's E&P and expenses incurred due to the stock redemption. Thus it should have ample evaluation. With regard to Barry, this transaction would be treated as receiving complete terminal redemption unless there is a family relationship. Barry's tax impact would be the property and stock basis transferred to him