Katie owns $200$ shares of Baltimore Corporation common stock which was purchased on March $20,2008,$ for $$35,000.$ On August $11$ of the current year, she receives a distribution of $200$ stock rights. Each stock right has a $$15$ fair market value $($FMV$)$ and the FMV of the Baltimore common stock is $$90$ per share. With each stock right, she may acquire one share of Baltimore common stock for $$125.$

Read the requirements.

Requirement a$.$ How much gross income must Katie recognize? $($Enter a $"0"$ for a zero amount.$)$

Katie 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.

$$ Basis of rights

$($

$)x==1)$

The basis of each stock right received is $$

Requirement c$.$ If she sells the $200$ stock rights for $$7,400,$ 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 $200$ stock rights on September $11,$ what is the basis of the $200$ shares she receives and when does the holding period for those shares start?

The basis of the $200$ shares she receives is $.$ The holding period should start on $$