(Solution) - Unrelated parties Amy Beth Carla and Delta Corporation each own -(2025 Original AI-Free Solution)

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Unrelated parties Amy, Beth, Carla, and Delta Corporation each own 25 of the 100 outstanding shares of Axle Corporation stock. In a transaction that qualifies as a partial liquidation, Axle distributes $20,000 cash to each shareholder in exchange for five Axle shares. Each redeemed share has a $1,000 basis to the shareholder and a $4,000 FMV. How does each shareholder treat the distribution for tax purposes?