McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 51

Oriole Corporation, a privately held company, has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows:
Larry is considering retirement and would like to have the corporation redeem all of his shares for $400,000.
a. What must Larry do or consider if he wants to guarantee that the redemption will be treated as an exchange
b. Could Larry act as a consultant to the company and still have the redemption treated as an exchange