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The following facts should be used in answering questions eight through ten Jack...

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Accounting

The following facts should be used in answering questions eight through ten
Jack and Jill formed XYZ, Inc. ("XYZ") in 2005. From 2005 through today, Jack has owned 60% and
Jill 40% of the 1,000 XYZ shares issued and outstanding. The business has been very successful.
Regardless, Jack needs some cash. He has tried to sell 250 of his 600 shares but has not found
a buyer. Jack and Jill have agreed that XYZ will buy Jack's 250 shares in a redemption. Jack's
basis in the 250 shares is $25,000. XYZ will pay Jack $500,000 in buying back (redeeming) Jack's
250 shares. Jack and Jill are not related.
8. Under Section 302(b)(2), does Jack meet the 50% test?
YES NO

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