Fran owns all $100$ shares of Star Corporation stock. Her stock

basis is $$60,000.$ On December $1$ of the current year, Star distributes $50$ shares of preferred

stock to Fran in a nontaxable dividend. In the year of the distribution, Star$$s total E&P is

$$100,000,$ the preferred shares are worth $$150,000,$ and the common shares are worth

$$300,000.$

a$.$ What are the tax consequences to Fran and to Star if Fran sells her preferred stock to Ken

for $$200,000$ on January $10$ of the following year? In that year, Star$$s current E&P is

$$75,000($in addition to the $$100,000$ from the prior year$).$

b$.$ How would your answer to Part a change if Fran sells her preferred stock to Ken for

$$110,000$ instead of $$200,000?$

c$.$ How would your answer to Part a change if Star redeems Fran$$s preferred stock for

$$200,000$ on January $10$ of the following year?