Question: The Rose Corp declared a 4 for 1 stock split on Jan 20, Y1. Rose Corp had net taxable earnings in Y1 of 3 Million,

The Rose Corp declared a 4 for 1 stock split on Jan 20, Y1. Rose Corp had net taxable earnings in Y1 of 3 Million, and Accumulated E&P of 1 Million. (Assume for this question taxable income and Current Year E&P are the same) The fair market value of the stock distributed was 2 Million dollars. Leah owned 755 shares of Rose Corp before the stock split was declared, with a basis of $692 PER SHARE.

What amount does Leah recognize as dividend income. Assume the stock was trading at $120 before the split and $30 after the split.

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