The Adjusted Gross Estate of Keith, Decedent, Is $6 Million

The adjusted gross estate of Keith, decedent, is $6 million. Included in the gross estate is stock in Gold Corporation (E & P of $750,000) , a closely held corporation, valued at $2.4 million as of the date of Keith's death in 2011. Keith had acquired the stock twelve years ago at a cost of $420,000. Death taxes and funeral and administration expenses for Keith's estate are $1.2 million. Gold Corporation redeems one-half of the stock from Keith's estate in a § 303 redemption to pay death taxes using property with a fair market value of $1.2 million (adjusted basis of $950,000) . Which of the following is a correct statement regarding the tax consequences of this redemption?

A) The estate will have a basis of $950,000 in the property received from Gold Corporation in redemption of the estate's stock.
B) Gold Corporation will recognize gain of $250,000 on the distribution of the property to Keith's estate.
C) Gold Corporation will not reduce its E & P as a result of the distribution of the property to Keith's estate.
D) The estate will recognize a $990,000 long-term capital gain on the redemption.
E) None of the above.