On January 5, 2018, Henry purchases 500 shares of Wichmann, Inc., common stock at a cost of $24,700. On April 1, 2018, he purchases an additional 300 shares for $19,500. On November 13, 2018, Wichmann, Inc., declares and distributes a 30% stock dividend. On December 23, 2018, Wichmann distributes a cash dividend of 50 cents per share. On February 19, 2019, Henry sells 800 shares of the Wichmann, Inc., stock for $45 per share.

a. How much income or loss does Henry recognize in 2018 and 2019 on his Wichmann, Inc. stock? 

b. Explain how Henry can improve the tax results of the 2019 sale.