Lone Star Company is a calendar-year corporation, and this year Lone Star reported $210,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $25,200. At the beginning of the year, Lone Star's sole shareholder was Matt. Lone Star declared $63,000 in cash distributions on each of the following dates: March 31, June 30, September 30, and December 31.

b. Suppose that Matt sold half of the shares to Chris on June 1st for $51,000. How much dividend income will Matt recognize this year?

c. If Matt's basis in the Lone Star shares was $7,440 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star?