All of the stock in Robin Corporation (E & P of $600,000)is held by three unrelated individuals as follows: Shontelle has 150 shares,Marta has 150 shares,and Diego owns 200 shares.Robin Corporation redeems 100 of Diego's shares (basis of $9,000)for $50,000.If Diego's stock is a capital asset that has been held for the requisite holding period,he has a long-term capital gain of $41,000.

Question

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The transaction qualifies under § 302(b)(2)as a disproportionate redemption.Diego had a 40% ownership in Robin Corporation before the redemption and a 25% ownership after the redemption (100 shares owned by Diego after redemption ÷ 400 shares outstanding after redemption = 25%).This represents less than 80% of his original ownership [25% < 32% (80% F1F1F1S1F1F1F10 40%)] and less than 50% of the total voting power of the corporation.

All of the Stock in Robin Corporation (E & P