b. What is R's basis in the preferred stock? c. On June 1,R sells 25 shares of common stock for $175 per share and 25 shares of preferred stock for $75 per share. What is R 's recognized gain or loss? Is it long-term or short-term? -29 Stock Dividends: Computations. E, an individual, has the following stock dividend information: All stock dividends were distributed in the current year, and all shareholders were required to receive the shares. Compute the tax effects to E for each of the three stock dividends. on February 1 of this year the consequences of the distribution to H for each of the following situations: 3-17 Operating Rules: Multiple Cash Distributions. W Corporation was owned by C prior to a sale of all of his stock (basis at the beginning of the year, $5,000 ) to D in June for $10,000. During the year, W Corporation distributed $60,000 on May 1 and $40,000 on September 1. Indicate how the distributions would be treated by individual shareholders C and D in the following situations: 3-18 Multiple Cash Distributions-Positive E\&P. Z Corporation's books reveal the following information at year-end before cash distributions are considered: M is a 10% shareholder whose basis for 1,000 shares is $8 per share, or $8,000 total. Compute the tax consequences to Z and M if corporate cash distributions during the year were: a. $30,000 on December 31 . b. $12,000 for each of the first two quarters and $18,000 for each of the last two quarters. Distribution of Appreciated Property: General Concepts. During the year, XYZ Sand and Gravel Corporation distributed a parcel of land to its sole shareholder, A. The land (value $20,000, cost $3,000 ) had been used in the corporation's quarry operations. a. What is the effect of the distribution on the shareholder's taxable income? b. What is A's basis in the land? c. What is the effect of the distribution on XYZ's taxable income? d. What is the effect of the distribution on XYZ's E\&P? e. How would your answers to (a), (b), (c), and (d) change if A were a corporation