Problem $6-52($LO$.3)$ Ramon and Sophie are the sole shareholders of Gull Corporation. Ramon and Sophie each have a basis of

$$100,000$

in their $2,000$ shares of Gull common stock. When its E $\backslash$& P was

$$700,000$

$,$ Gull Corporation issued a preferred stock dividend on the common shares of Ramon and Sophie, giving each $1,000$ shares of preferred stock with a par value of

$$100$

per share. At the time of the stock dividend, fair market value of one share of common stock was

$$150$

and fair market value of one share of preferred stock was

$$75$

$.$ If an amount is zero, enter $"0".$ a$.$ What are the tax consequences of the distribution to Ramon and Sophie? Ramon and Sophie have in the amount of

$

What is the basis for the common stock and preferred stock for each shareholder? Common stock: $\backslash$$ Preferred stock:

$

b$.$ What are the tax consequences to Ramon if he later sells his preferred stock to Anthony for

$$75,000$

$?$ Anthony is not related to Ramon. A sale of the preferred stock to Anthony will produce

$

of income. c$.$ Indicate whether the following are tax consequences if$,$ instead of Ramon selling the preferred stock to Anthony, Gull Corporation redeems the stock from Ramon for

$$75,000$

$.$ Assume Gull's E $\backslash$& P at the time of the redemption is

$$650,000$

$.$ Select "Yes" or $"$No$",$ whichever is applicable. a$.$ The shareholder recognizes dividend income to the extent of the corporation's E $\backslash$& P on the date of the redemption. b$.$ The entire

$$75,000$

of redemption proceeds will be dividend income to Ramon. c$.$ The

$$20,000$

of the basis in the preferred stock is added back to the basis of Ramon's common stock. d$.$ Gull's E $\backslash$& P is increased by the

$$75,000$

dividend distribution.