1. Hill Corporation is organized with two classes of voting common stock: Class A and Class B. Shares in each class of stock have an equal right to Hill's assets and earnings and profits. Frank owns 100 shares of Class A stock, and Fay and Joyce each own 50 shares of Class B stock. Assuming that Hill Corporation has ample earnings and profits, determine whether the following distributions are taxable under $301 or excludable under 305(a) : (a) A pro rata distribution of nonconvertible preferred stock to both classes of shareholders. (b) A pro rata distribution of Class A stock on Class A and Class B on Class B. The Class B shareholders also are given the option to take cash in lieu of additional Class B shares. Joyce exercises this option. (c) A pro rata distribution of Class A stock on Class A and a cash distribution on Class B. (d) Assume that Class B is a class of nonconvertible preferred stock which pays regular cash dividends and Hill distributes Class B stock to the Class A shareholder. (e) Same as (d), above, except that Hill distributes a class of nonconvertible preferred stock which has rights to assets and earnings and profits subordinate to those of the existing Class B stock (i.e., "junior" nonconvertible preferred stock) to the