Julian Berta And Maria Own 400 Shares 400 Shares And 200 Shares Respectively In

Julian, Berta, and Maria own 400 shares, 400 shares, and 200 shares, respectively, in JBM Corporation with earnings and profits of $750,000. Berta is Julian’s sister, and Maria is Julian’s aunt. JBM Corporation redeems all of Julian’s stock for $420,000. Julian paid $200 a share for the stock five years ago. Julian continued to serve on JBM Corporation’s board of directors after the redemption. With respect to the redemption:Answer A.

 

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