Question

Which of these statements are true? please provide reasoning and irc citations

7A corporation distributes property (fair market value of $20,000; basis of $13,000) to a shareholder

m a qualifying stock redemption. The shareholder will have a basis in the property equal to the

corporation's basis in the properly, or $13,000.

8In applying the stock attribution rules to a stock redemption, a shareholder is treated as owning the

stock of her siblings (i.e., sisters and brothers).

9In applying the stock attribution rules to a stock redemption, stock owned by a partnership is deemed

to be owned in full by a partner of the partnership.

10. In determining whether the meaningful reduction test has been met (for purposes of a not essentially

equivalent redemption), the most significant factor considered is a reduction in the shareholder's

voting control.

Answer 1

Part 7

False

The shareholder’s basin in the property distributed by the corporation is equal to the fair market value. In the given case it will be $20000.

Part 8

False

According to section 318 there is no attribution of stock from siblings in a stock redemption.

Part 9

False

According to section 318, Stock owned by a partnership is deemed to be owned proportionately by a partner.

Part 10

True.

According to section 308(b), a redemption will qualify as a not essentially equivalent redemption only when there is meaningful reduction in the shareholder's voting control.