Dave, Erica, and Faye Are All Unrelated

question 42

Essay

Dave, Erica, and Faye are all unrelated. Each has owned 100 shares of News Corporation stock for five years and each has a $180,000 basis in those 100 shares. News Corporation's E&P is $720,000. News redeems all 100 of Dave's shares for $300,000, their FMV.
a)What is the amount and character of Dave's recognized gain or loss? What basis do Erica and Faye have in their remaining shares? What effect does the redemption have on News's E&P?
b)Assuming instead that Dave is Erica's son, answer the questions in part (a)again.

---

Definitions:

Incremental Organizational Change

Gradual, step-by-step changes implemented within an organization to improve or adapt its processes and structures.

HR Practices

The methods, strategies, and techniques utilized by human resource professionals to manage and develop an organization's workforce.

Achieving Objectives

The process of meeting specific goals or targets set by an individual or organization through planned and structured efforts.

Change

The process or act of making something different, often used in the context of organizational or personal development.