In the AC430 Unit 9 analysis of a composite family buyback, attribution comes before Section 302's tests, and the result is a dividend unless the termination route is taken. Searches like "ac 430 unit 9 assignment example", "ac430 unit 9 sample" and "ac430 unit 9 example" land here.
What a finished AC430 Unit 9 redemption analysis looks like
A three-part analysis with an ownership table at its head. The table shows each holder's shares before and after, direct and constructive. Under Section 318(a)(1), Rosa is treated as owning her son's 25 shares, so her interest runs from 85 percent before the redemption to 75 percent after, even though her direct holding falls to a third. Part one tests Section 302(b)(2): 75 percent fails both the below-50 rule and the 80 percent ratio, which would require an interest under 68 percent. Part two tests Section 302(b)(1) and finds no meaningful reduction for a shareholder who keeps control. Part three reruns the facts as a redemption of all 60 shares with the family attribution waiver in Section 302(c)(2), and sets its result beside the dividend outcome.
How a AC430 Unit 9 example is structured
The analysis moves from arithmetic to judgment. Attribution comes first because every test is measured on constructive ownership, and a table that skips it produces a false pass. The substantially disproportionate test is applied next, as the only one with bright lines, and both of its thresholds appear as computed figures. The meaningful reduction test follows, with United States v. Davis cited for the rule that business purpose cannot rescue a redemption lacking one. Consequences come after each outcome: as a dividend, [$160,000] is taxed under Section 301 to the extent of E&P, and the [$20,000] basis of the redeemed shares moves to Rosa's remaining shares; as a complete termination, [$240,000] less [$30,000] of basis yields $210,000 of capital gain. A final block states the waiver's conditions and its ten-year window.
Ownership, direct and constructive
A table sets Rosa's 60 direct shares beside the 25 attributed from her son, before and after the buyback, so every later percentage has a source.
Bright lines first
Section 302(b)(2) needs an interest under 50 percent and under 68 percent here; 75 percent fails both.
No meaningful reduction
Davis is cited for the rule that a shareholder still in control has not meaningfully reduced her interest, whatever the business reason.
Dividend consequences and shifted basis
The [$160,000] counts as a dividend up to the E&P balance, and the [$20,000] basis of the surrendered shares attaches to the 20 she keeps.
Complete termination with a waiver
Redeeming all 60 shares, with family attribution waived and no role left for ten years, produces $210,000 of capital gain instead.
Where marks go in AC430 Unit 9
Attribution decides most grades on this problem. An analysis that measures Rosa at her direct 33 percent passes the substantially disproportionate test and reaches the wrong answer with confident arithmetic. Applying only one of the (b)(2) thresholds is a close second, since both must be met. Some submissions invoke business purpose to rescue the redemption under (b)(1), which Davis rejects. On the consequences side, graders mark down a dividend outcome that forgets the redeemed shares' basis, as if it vanished rather than moving to the retained stock. The termination route draws its own errors: omitting the filed agreement, or keeping Rosa on as a paid consultant, which courts have treated as a retained interest. A corporate side left blank, with no mention of the E&P reduction under Section 312(n)(7), costs a smaller amount.
Get a AC430 Unit 9 example written to your instructions
Include the share table from the Unit 9 problem, the basis of every holder, the E&P balance and the rubric. Attribution is applied before any test, each Section 302 route is worked to its consequence, and the analysis returns within 24-48h. The first custom sample costs nothing, and the family is invented.
AC430 Unit 9 questions, answered
Why does the son's stock count as Rosa's?
Section 318(a)(1) treats an individual as owning stock held by a spouse, children, grandchildren and parents. Rosa's son's 25 shares are therefore hers for Section 302 purposes, which is why a buyback that cuts her direct holding to a third still leaves her in control. Siblings are not on the list, so a problem with a brother instead of a son would come out differently.
Can the waiver ever be used for a partial redemption?
No. The family attribution waiver in Section 302(c)(2) applies only to a complete termination under Section 302(b)(3), and it requires Rosa to give up every interest other than as a creditor and to file an agreement. The example includes the waiver route to show the contrast, since prompts in this unit often ask which structure would have produced sale treatment.
What happens to the company's E&P after the redemption?
If the redemption is an exchange, Section 312(n)(7) limits the E&P reduction to the redeemed shares' ratable share. If it is a dividend, E&P falls by the dividend amount. The example states both in its corporate block, briefly, because many rubrics ask for consequences at the corporate level as well as for the shareholder.