1. a) $0
b) 6,000 – [(25÷50)*2,000] = 6,000 – 1,000 = $5,000
c) 2,000 – [(25÷50)*2,000] = 2,000 – 1,000 = $1,000

2. a) $6,000
b) $0
c) $2,000

3. 80% * (50/100) = 40% 25/75 = 33.3% 40 % > 33.3% Passes 80% test
After Redemption: 25/75 = 33.3% 33.3% < 50% Passes 50% test
Both tests passed Qualifying Redemption a) $0 b) 6,000 – [(25÷50)*2,000] = 6,000 – 1,000 = $5,000 c) 2,000 – [(25÷50)*2,000] = 2,000 – 1,000 = $1,000

4. 80% * (60/100) = 48% 45/85 = 52.9% 48 % < 52.9% Fails 80% test
After Redemption: 45/85 = 52.9% 52.9% > 50% Fails 50% test
Both tests failed Not a Qualifying Redemption a) $6,000 b) $0 c) $2,000

5. 80% * (60/100) = 48% 35/75 = 46.6% 48 % > 46.6% Passes 80% test
After Redemption: 35/75 = 46.6% 46.6% < 50% Passes 50% test
Both tests passed Qualifying Redemption a) $0 b) 6,000 – [(25÷60)*2,000] = 6,000 – 833.33 = $5,166.67 c) 2,000 – [(25÷60)*2,000] = 2,000 – 833.33 = $1,166.67

6. a) 100,000 – 25,000 = $75,000
b) 100,000 – 26,000 = $74,000

7. a) 300,000 – 100,000 = $200,000 Gain
b) 300,000 – 20,000 = $280,000 Capital Gain
c) $300,000

8. a) 300,000 – 100,000 = $200,000 Gain
b) 250,000 – 20,000 = $230,000 Capital Gain
c) $250,000

9. Parent RZ Corporation Sub Spring Corporation a) No Gain or Loss Recognized b) No Gain or Loss Recognized c) $100,000 d) It goes away e) 600,000 + 1,000,000 = $1,600,000

10. a) 110,000 – 60,000 = $50,000 Gain
b) 90,000 – 110,000 – 8,000 = $ <28,000> Loss
c) $110,000
d) $0

11. a) $0
b) $90,000
c) $90,000
d) $16,000

12. a) 60,000 – 100,000 = $ <40,000> Recognized Loss
b) 60,000 – 16,000 = $44,000 Capital Gain
c) $60,000