15. David has died and his estate now owns $2,500,000 worth of XX Corp stock. The total estate is $6 million. The estate

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15. David has died and his estate now owns $2,500,000 worth of
XX Corp stock. The
total estate is $6 million. The estate needs $475,000 to cover
inheritance taxes, and
funeral and estate administration costs. It redeems stock in XX
for $500,000 in a
redemption that does not qualify under any of the "302(b)"
tests. Show the calculations
you use to determine how much dividend income David's estate
will have?
16. A corporation liquidates, distributing $40,000 in cash to
its only shareholder (Ellen)
and a machine in which its basis was $10,000, value $12,000.
Ellen's basis in her stock
was $34,000.
(a) How much gain or loss does Ellen recognize?
(b) How much gain or loss does the corporation recognize?
(c) What's Ellen's basis in the machine?