Ivory Corporation (E & P of $1 Million) Has 2,000

Essay

Ivory Corporation (E & P of $1 million) has 2,000 shares of common stock outstanding owned by unrelated parties as follows: Veronica, 1,000 shares, and Tommie, 1,000 shares. Veronica and Tommie each paid $150 per share for the Ivory stock 12 years ago. In May of the current year, Ivory distributes land held as an investment (basis of $180,000, fair market value of $390,000) to Veronica in redemption of 350 of her shares.
a. What are the tax results to Veronica on the redemption of her Ivory stock?
b. What are the tax results to Ivory Corporation on the distribution of the land?