Can you please explain the answer?

S. Pursuant to a IVDEL reorganization , ALICE LEWIS Exchanged 1, UND shares in Blades , Inc ., Witha basis of $ 1 1, 000and a value of $9, 000 for " new " stack in Razors , Inc . worth $8, 500 and cash of $1, 000 . BladesEarnings andprofits were significant . Alice Must RECOGNIZE*2 . Dividend income of $ 1, 000b. Long - term capital loss of $ 1, 500C . Long-term capital gain of $ 1 , 000J . No gain or loss