M Corporation has 100 shares of outstanding stock, all of which are owned by B.Assuming M Corporation redeems 70 of B's shares, the redemption does not qualify for exchange treatment.

Question

Quizplus · Accepted Answer

The redemption does not qualify for exchange treatment because B still owns more than 50% of the corporation's stock after the redemption, failing the "substantially disproportionate" test for exchange treatment.

M Corporation Has 100 Shares of Outstanding Stock, All of Which