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What does the equity section look like after the redemption

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Question - Korak, Inc.'s equity section appears as follows:

Capital stock, 1,000 shares, par $1 $1,000

Paid-in capital 9,000

Earnings and profits 30,000

At this time, Korak redeems 40 percent of its shares for $17,000 from an individual shareholder with a basis of $20,000 in a transaction qualifying as a complete termination.

What is the amount and character of gain or loss recognized by the shareholder? The corporation?

What does the equity section look like after the redemption?

Reference no: EM132556410

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