I have 3 shareholders in an S corp - A, B, and C.  Shares of A are being redeemed out by the corp.  Do the remaining shareholders B & C have a taxable event because their interests proportionately go up? Current equity breakdown is 65, 30 and 5.  65 shares redeemed from A.  35 shares remain between the other two shareholders B & C -- ownership goes to 15% and 85%.  I can't find a clear answer anywhere.