b. Complete the memo for the file describing the tax consequences of the stock sale. TAX FILE MEMORANDUM DATE: February 17, 2022 FROM: Heywood R. Floyd SUBJECT: Jacob Corcoran Today I conferred with Jacob Corcoran regarding his letter of February 10th. Two years ago, Mr. Corcoran purchased 10,000 shares of Grebe Corporation for $24,000. Last year, he received a nontaxable stock dividend of 2,000 additional shares. He sold the 2,000 shares this year for $18,000 and has asked me to determine the tax consequences of the sale. Issue: How is the gain or loss determined on the sale of shares of stock received as nontaxable stock dividends determined, and how is it taxed? Conclusion: The shareholder's basis in the original 10,000 shares is reallocated to the 12,000 shares held after receiving the on the sale of the stock dividend. His basis after the stock dividend is s per share. His ( because the holding period of the original shares 2,000 shares is $ This is treated as