Assignment Choice #2: Stock RedemptionsFor this assignment, read the scenario below and then evaluate the impact of the stock redemption.Adams, Inc. is a family-owned business that has one class of stock.There are 600 shares allocated equally to Al Adams, Bev Adams, CurtAdams, Derek Adams, Elroy Adams and Fred Murray. Fred is not related tothe Adams family. He would like to sell has shares back to Adams, Inc.Fred’s shares have a FMV of $200,000 and a tax basis of $50,000. Theredemption is planned for December 31.Is it possible to determine if there will be a dividend orcapital gain from the information provided? If so, calculate it. If not,what information would you need?Would this transaction meet the three IRS change in stock ownership tests? Explain each test and the results.Under what circumstances would Fred be deemed to have constructive ownership of more than 100 shares?Requirements:Back up your discussion with research from two scholarly sources (youmay not use the course textbook to fulfill this requirement).Your responses to the questions above as well as your analysisshould be 4-5 pages in length not counting the title and referencepages, which you must include.Your paper must be formatted according to the CSU-Global Guide to Writing and APA Requirements.