Indigo Corporation has $15,000 AEP and CEP of $30,000. Renee, the sole shareholder of Indigo Corporation, sold all her stock of Indigo to Chad on July 1 for $180,000. Renee's stock basis at the beginning of the year was $125,000. Indigo made a $60,000 cash distribution to Renee immediately before the sale and Chad received a $140,000 cash distribution from Indigo on November 1. Which of the following statements is correct?

Select one:

a.

Renee recognizes a $91,000 gain on the sale of the stock.

b.

Renee recognizes a $84,000 gain on the sale of the stock.

c.

Chad recognizes dividend income of $21,000 and his stock basis is $61,000

d.

Both a and c. are correct.

e.

None of these.