Assignment:
I want assistance in understanding what would be the tax consequences of the two options to the three sisters, who are active in managing Delray.
Question 1: Amanda, Sue, and Mary each own 100 of the 300 outstanding shares of Delray Corporation stock. Amanda wants to sell her shares, which have a $40,000 basis and a $100,000 FMV.
Question 2: Either Sue and/or Mary can purchase her shares, 50 shares each, or Delray can redeem all of Amanda's shares. Delray has a $150,000 E&P balance.