During the current year, Gnatcatcher, Inc., (E & P of $1,550,000) distributed $705,000 each to Brandi and Yuen in redemption of some of their Gnatcatcher stock. The two shareholders acquired their shares five years ago. Each shareholder is in the 33% tax bracket, and each had a $176,250 basis in the redeemed stock. If required, round your answers to nearest dollar.

a. Assume the distribution to Brandi is a qualifying stock redemption.

The distribution is taxed as a Selectdividendsale or exchange and Brandis tax liability on the distribution is $._________

b. Assume the distribution to Yuen is a nonqualified stock redemption.

The distribution is taxed as a Selectdividendsale or exchangeCorrect 1 of Item 2 and Yuens tax liability on the distribution is $. _________