Question - Beige, Inc., has 3,000 shares of stock authorized and 1,000 shares outstanding. The shares are owned by Sam (600 shares) and Lois (400 shares). Sam's adjusted basis for his stock is $60,000 and Lois' adjusted basis for her stock is $40,000. Beige's earnings and profits are $300,000. Beige redeems 200 of Lois' shares for $100,000. Determine the amount of Lois' recognized gain (1) if she is Sam's mother and (2) if they are unrelated.
a. $0 and $0.
b. $100,000 and $60,000.
c. $100,000 and $80,000.
d. $100,000 and $100,000.
e. None of the above.