List the requirements for an owner of corporate stock who sells to an ESOP to quality for the nonrecognition of gain treatment

Prompt 1: List the requirements for an owner of corporate stock who sells to an ESOP to quality for the nonrecognition of gain treatment.

Prompt 2:

Scenario 1:

Marcus, age 61, is a participant in a stock bonus plan. The value of the employer stock contributions to the plan over the course of his participation totaled $165,000. On December 1st this year, Marcus takes a full distribution of the employer stock from the plan at a value of $550,000. Fourteen months later, Marcus sells all of the stock for $400,000.

Question: Which of the following statements is true? Explain your answer.

1. Marcus has a long-term capital gain of $385,000 for this year.
2. Marcus has ordinary income of $165,000 this year.
3. Marcus has a long-term capital loss of $150,000 next year.
4. Marcus has ordinary income of $165,000 and long-term capital gain of $385,000 this year.

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