Kara owns 400 shares of Barter Corporation common stock which was purchased on March 20, 2000, for $50,000. On October 15 of the current year, she receives a distribution of 400 stock rights. Each stock right has a $10 FMV and the FMV of the Barter common stock is $40 per share. With each stock right, she may acquire one share of Barter common stock for $110. Read the requirements. Requirement a. How much gross income must Kara recognize? (Enter a "0" for a zero amount.) Kara must recognize of gross income. Requirement b. What is the basis of each stock right received? (Do not round intermediary calculations. Only round the amounts you input in the cells to the nearest dollar. Enter amounts as totals, not amounts per share.) First, calculate the total basis, we will calculate the basis of each stock in the next step. D) X = Basis of rights The basis of each stock right received is $ Requirement c. If she sells the 400 stock rights for $12,500, what is her gain? (Use parentheses or a minus sign to show a loss.) Stock rights Less: Realized gain (loss) Requirement d. If she exercises the 400 stock rights on November 15, what is the basis of the 400 shares she receives and when does the holding period for those shares start? The basis of the 400 shares she receives is $ The holding period should start on X Requirements a. How much gross income must Kara recognize? b. What is the basis of each stock right received? c. If she sells the 400 stock rights for $12,500, what is her gain? d. If she exercises the 400 stock rights on November 15, what is the basis of the 400 shares she receives and when does the holding period for those shares start? Print Done