White Corporation has 100 shares of stock outstanding. Ann owns 40 of these shares, and unrelated individuals

Question:

White has 100 shares of stock outstanding. Ann owns 40 of these shares, and unrelated individuals own the remaining 60 shares. White redeems 30 of Ann’s shares for $30,000. In the year of the redemption, White has $30,000 of paid-in capital and $80,000 of E&P.
a. How does the redemption affect White’s E&P balance if the redemption qualifies for sale treatment?
b. How does the redemption affect White’s E&P balance if the redemption does not qualify for sale treatment?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...