Crow Corporation was organized ten years ago to construct office buildings.Six years ago,Crow began selling office furniture.In the current year,Crow discontinues its office furniture business and sells all of the assets used in that business for $1 million.Further,Crow distributes the entire sales proceeds in a pro rata redemption of 100 shares of stock from each of its two equal shareholders-Monique,an individual,and Eagle Corporation (i.e. ,200 shares in total redeemed).Monique has a basis of $80,000 in her redeemed stock,Eagle Corporation has a basis of $95,000 in its redeemed stock,and both shareholders have held their stock interest in Crow for several years.Crow Corporation has E & P of $2 million and 1,000 shares outstanding at the time of the distribution.What are the tax consequences of the stock redemption to Monique,to Eagle Corporation,and to Crow Corporation?

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The Answer of Crow Corporation was organized ten years ago to construct office buildings.Six years ago,Crow began selling office furniture.In the current year,Crow discontinues its office furniture business and sells all of the assets used in that business for $1 million.Further,Crow distributes the entire sales proceeds in a pro rata redemption of 100 shares of stock from each of its two equal shareholders-Monique,an individual,and Eagle Corporation (i.e. ,200 shares in total redeemed).Monique has a basis of $80,000 in her redeemed stock,Eagle Corporation has a basis of $95,000 in its redeemed stock,and both shareholders have held their stock interest in Crow for several years.Crow Corporation has E & P of $2 million and 1,000 shares outstanding at the time of the distribution.What are the tax consequences of the stock redemption to Monique,to Eagle Corporation,and to Crow Corporation?

Crow Corporation Was Organized Ten Years Ago to Construct Office