In 2022, the great pine tree blight wiped out all Brushy Mountain Inc.s planted pine trees, however the prior year harvest of trees was safe in the warehouse contributed by Rachilla. As a result, the price of Pine trees skyrocketed, and Brushy Mountain had a banner year in profits. It had taxable income of $3,000,000 after considering ALL Expenses (except as noted below). Of course, Brushy Mountain had to celebrate, and it had a lavish party for its shareholders and employees. The cost of the party was $200,000 but this was not included in the taxable income above. Tax exempt Income was $100,000 for tax year 2022. On December 1^st, 2022, Brushy Mountain paid all dividends in arrears on the preferred stock. In addition, it paid a cash dividend to all common shareholders in the amount of $15 per share. Since it no longer needed the warehouse, the great pine tree blight left them with no inventory, they decided to distribute the warehouse equally to all common shareholders. At the time of the distribution, the warehouse had an adjusted basis of $75,000 and a fair market value of $50,000. The Chainsaws were also distributed to the common shareholders and had an adjusted basis of $0 and a fair market value of $25,000 at the time of the distribution.

- Explain and calculate all federal income tax consequences to the Corporation and each shareholder, that occur as result of the operations and various distributions, that occurred during the 2022 tax year.