Floral Corporation has a single class of common stock outstanding. Tammy owns 1,000 ?shares, which she purchased in 20112011 for $160,000. Floral declares a stock dividend payable in 8?% preferred stock having a $230 par value. Each shareholder receives oneone share of preferred stock for tenten shares of common stock. On the distribution dateDecember ?10, 2015the common stock was worth $437 per? share, and the preferred stock was worth $230 per share. On April? 1, 2015?, Tammy sells halfhalf of her preferred stock for $10,500.

Requirements

a.	How much income must Tammy recognize when she receives the stock? dividend?
b.	How much gain or loss must Tammy recognize when she sells the preferred? stock? (Ignore the implications of Sec.? 306.)
c.	What is Tammy's basis in her remaining common and preferred shares after the? sale? When does her holding period for the preferred shares? begin?