Sara owns 80 percent of the stock of Lea Corporation.Unrelated individuals own the remaining 20 percent.For a stock redemption of Sara's stock to be treated as an exchange under the "substantially disproportionate" test, what percentage of Lea stock must Sara own after the redemption?
A)Any percentage less than 80 percent.
B)Any percentage less than 50 percent.
C)Any percentage less than 64 percent.
D)All stock redemptions involving individuals are treated as exchanges.

Question

Quizplus · Accepted Answer

The Answer of Sara owns 80 percent of the stock of Lea Corporation.Unrelated individuals own the remaining 20 percent.For a stock redemption of Sara's stock to be treated as an exchange under the "substantially disproportionate" test, what percentage of Lea stock must Sara own after the redemption?
A)Any percentage less than 80 percent.
B)Any percentage less than 50 percent.
C)Any percentage less than 64 percent.
D)All stock redemptions involving individuals are treated as exchanges.

Sara Owns 80 Percent of the Stock of Lea Corporation