Gary owns 100 shares of common stock (class A) in Justine Inc. which he acquired on October 10,2008 , for \(\$ 5,000\). On July 8, 2018, Gary received 20 shares of class \(B\) common stock in a proportionate distribution. At the time of the distribution the fair market values of the class \(A\) and class B stock were \(\$ 75\) and \(\$ 45\) per share, respectively. Justine's current E\&P for 2018 was \(\$ 60,000\). On August 18, 2018, Gary sold the 20 shares of class B stock for \(\$ 1,000\).

a. What are the tax consequences of the distribution on July 8, 2018, to Gary?

b. What are the tax consequences of the sale on August 18,2018, for Gary?