Hummingbird Corporation has 1,000 shares of common stock outstanding owned by unrelated parties as follows: Juan,400 shares,Erika,400 shares,and Dalissa,200 shares.Each of the three shareholders paid $100 per share for the Hummingbird stock 10 years ago.Hummingbird has $800,000 of accumulated E & P and $40,000 of current E & P.In January of the current year,Hummingbird distributes land held as an investment (adjusted basis of $40,000,fair market value of $200,000)to Dalissa in redemption of all 200 of her shares.In December of the current year,Hummingbird distributes securities held as an investment (adjusted basis of $280,000,fair market value of $250,000)to Erika in redemption of 250 of her shares.
a.What are the tax results to Dalissa on the redemption of her Hummingbird stock?
b.What are the tax results to Erika on the redemption of her Hummingbird stock?
c.What gain or loss is recognized by to Hummingbird Corporation on the two redemptions?

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The Answer of Hummingbird Corporation has 1,000 shares of common stock outstanding owned by unrelated parties as follows: Juan,400 shares,Erika,400 shares,and Dalissa,200 shares.Each of the three shareholders paid $100 per share for the Hummingbird stock 10 years ago.Hummingbird has $800,000 of accumulated E & P and $40,000 of current E & P.In January of the current year,Hummingbird distributes land held as an investment (adjusted basis of $40,000,fair market value of $200,000)to Dalissa in redemption of all 200 of her shares.In December of the current year,Hummingbird distributes securities held as an investment (adjusted basis of $280,000,fair market value of $250,000)to Erika in redemption of 250 of her shares.
a.What are the tax results to Dalissa on the redemption of her Hummingbird stock?
b.What are the tax results to Erika on the redemption of her Hummingbird stock?
c.What gain or loss is recognized by to Hummingbird Corporation on the two redemptions?

Hummingbird Corporation Has 1,000 Shares of Common Stock Outstanding Owned