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  3. i own 100 shares out of 400 outstanding of the msh

I own 100 shares out of 400 outstanding of the MSH corporation. I acquired the...

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Accounting

  1. I own 100 shares out of 400 outstanding of the MSH corporation. I acquired the shares for $1 per share, and they are now worth $5 per share. MSH corporation distributes $500 to me in complete redemption of my 100 shares, which I remitted back to MSH corporation. MSH corporations accumulated E&P prior to the distribution was $4,000.

a. What tax result to me and MSH corporation?

b. How would your to a. above answer change if my daughter also owned 200 shares of MSH corporation?

c. How would your answer to a. above change if MSH corporation paid me $6 per share, and I also signed a covenant not to compete with MSH?

d. Would your answer to a. above change if MSH corporation distributed $400 to me in exchange for 80 of my shares, and I sold the other 20 shares to an unrelated person for $100?

  1. I own 100 of the 1000 shares of MSH corporation. I paid $1 per share, and they are now worth $5 per share. MSH corporation redeems 10 of my shares for $50. MSH corporations E&P prior to the redemption was $10,000.

a. What tax result?

b. Would your answer to a. change if MSH redeemed 30 of my shares for $150?

c. Would your answer to a. change if the $50 redemption represented the proceeds from the sale of a line of business of MSH?

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