Lee Owns All the Stock of Vireo, Inc

question 28

Essay

Lee owns all the stock of Vireo, Inc., a C corporation for which he has an adjusted basis of $150,000. The assets of Vireo, Inc., are as follows:
Lee sells his stock to Katrina for $300,000.
a. Determine the tax consequences to Lee.
b. Determine the tax consequences to Katrina.
c. Determine the tax consequences to Vireo, Inc.

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Definitions:

Parol Evidence Rule

A legal principle that prevents parties in a written contract from presenting external evidence that contradicts or adds to the written terms of the contract.

Written Contract

An agreement between parties that is recorded in a tangible form on paper or digitally, detailing the terms and conditions bound by law.

Subsequent

Pertaining to events or actions that occur after a specified point in time.

Statute of Frauds

A legal principle requiring certain contracts, such as those for the sale of land or goods over a certain value, to be in writing and signed by the party to be charged to be enforceable.