S corp redemption - effect on remaining shareholders

[bdiazNYC]

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. 

[sjrcpa]

No effect on remaining shareholders.

[Accountant-Man]

Remaining s/h's B&C have an increase on their pcts. when A's shares are redeemed. What is the effective date for the redemption? You have to enter the change and decide how to allocate income from the ABC shares' pcts. to the AB shares' pcts..

[bdiazNYC]

Thank you 

[bdiazNYC]

Thank you. Can you clarify- what do you mean by pcts? 

[abctax55]

pcts = percentages of ownership

[bdiazNYC]

Ah yes of course. Percentages get readjusted to 85-15. Reallocation as of redemption date. Thank you 

[bdiazNYC]

Hi.  Follow up question.  Remaining shareholder ownership percentages get readjusted.  But no basis step up for either correct? Since no consideration granted for the stock. Thanks. I saw a post somewhere that said they get a step up but I can't figure out why that would be or how.