Clyde and Bonnie are the only two shareholders in Getaway Corporation. Bonnie owns 60 shares with a basis of $6,600, and Clyde owns remaining 40 shares with a basis of $15,000. At year-end, Getaway is considering different alternatives for redeeming some shares of stock. Determine whether each of the subsequent stock redemption transactions will qualify for sale and exchange treatment.
a. Getaway redeems 16 of Bonnie's shares for $5,000. Getaway has $26,000 of E&P at year-end and Bonnie is unrelated to Clyde.
Bonnie owns 60 percent before the redemption and % after the redemption.
b. Getaway redeems 29 of Bonnie's shares for $10,000. Getaway has $26,000 of E&P at year-end and Bonnie is unrelated to Clyde.
Bonnie owns 60 percent before the redemption, % after the capital and redemption gain is $ .
c. Getaway redeems 8 of Clyde's shares for $5,500. Getaway has $26,000 of E&P at year-end and Clyde is unrelated to Bonnie.