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Required information The following information applies to the questions displayed below. Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for each 10 shares of stock they already own. Madison Cheesehead owns 1,000 shares of Badger stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this year. (Leave no answer blank. Enter zero if applicable.) c. How would you answer parts (a) and (b) if Badger offered shareholders a choice between receiving one additional share of Badger stock for each 10 Badger shares held or receiving $120 cash in lieu of an additional share of stock? If she takes the Stock $ 12,000S 12,000 Cash Taxable dividend income Income tax basis per share of new shares 11,000S 11,000 * 9 Required information The following information applies to the questions displayed below Wildcat Company is owned equally by Evan Stone and his sister Sara, each of whom hold 1,000 shares in the company. Sara wants to reduce her ownership in the company, and it was decided that the company will redeem 500 of her shares for $25,000 per share on December 31 of this year. Sara's income tax basis in each share is $5,000. Wildcat has current E&P of $10,000,000 and accumulated E&P of $50,000,000 b. What is Sara's income tax basis in the remaining 500 shares she owns in the company? Income tax basis of remaining shares 5,000 Gopher Corporation reported taxable income of $500,000 this year. Gopher paid a dividend of $100,000 to its sole shareholder, Sven Anderson. The dividend meets the requirements to be a qualified dividend, and Sven is subject to a tax rate of 15 percent on the dividend. What is the income tax imposed on the corporate income earned by Gopher and the income tax on the dividend distributed to Sven? Corporate tax Shareholder tax Total income tax $ 15,000