Exercise $13-5($Algorithmic$)($LO$.7)$

During the current year, Gnatcatcher, Inc. $($E & P of $$1,700,000),$ distributed $$360,000$ each to Brandi and Yuen in redemption of some of their Gnatcatcher stock. The two shareholders acquired their shares five years ago. Each shareholder is in the $32\%$ tax bracket, and each had a $$90,000$ basis in the redeemed stock. Assume taxpayers in the $32\%$ income tax bracket are subject to the long$-$term capital gains and qualified dividends tax rate of $15\%.$

If required, round your answers to nearest dollar.

a$.$ Assume that the distribution to Brandi is a qualifying stock redemption.

The distribution is taxed as a $.$ and Brandi's tax liability is $

b$.$ Assume that the distribution to Yuen is a nonqualified stock redemption.

The distribution is taxed a and Yuen's tax liability is &