Katrina owns $500$ shares of Bradford Corporation common stock which was purchased on March $20,2008,$ for $$70,000.$ On September $12$ of the current year, she receives a di rights. Each stock right has a $$10$ fair market value $($FMV$)$ and the FMV of the Bradford common stock is $$40$ per share. With each stock right, she may acquire one share of Br for $$135.$

Read the requirements.

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

Katrina 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 not,amounts per share.$)$

First, calculate the total basis, we will calculate the basis of each stock in the next step.

$\backslash$table$[[,),=$ Basis of rights$],[([)+1),=,]]$

The basis of each stock right received is

Requirement c$.$ If she sells the $500$ stock rights for $$16,400,$ 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 $500$ stock rights on October $12,$ what is the basis of the $500$ shares she receives and when does the holding period for those shares start?

The basis of the $500$ shares she receives is The holding period should start on