Exercise 19-27 (Algorithmic) (LO. 7) What are the tax consequences to Euclid from the following independent events? In your computations, do not round intermediate division. If required, round the per share answer to two decimal places. Round all other answers to the nearest dollar. a. Euclid bought 500 shares of common stock five years ago for $112,000. This year, Euclid receives 20 shares of common stock as a nontaxable stock dividend. As a result of the stock dividend, Euclid's per share basis is $ 168,000 X. b. Assume instead that Euclid received a nontaxable preferred stock dividend of 20 shares. The preferred stock has a fair market value of $11,200, and the common stock, on which the preferred is distributed, has a fair market value of $168,000. After the receipt of the stock dividend, the basis of the preferred stock is $ 0 X. 0X, and the basis of the common stock is Feedback Check My Work Historically, stock dividends were excluded from income on the theory that the ownership interest of the shareholder was unchanged as a result of the distribution. Recognizing that some distributions of stock could affect ownership interests, the 1954 Code included a provision ( 305) taxing stock dividends under certain circumstances.