Mantis, the sole shareholder of Xenomorph Corporation, sold her stock to Drax on July 1. Mantis stock basis at the beginning of the year was $150,000. Xenomorph made a $70,000 cash distribution to Mantis immediately before the sale, while Drax received a $140,000 cash distribution from Xenomorph on November 1. As of the beginning of the current year, Xenomorph had $35,000 in accumulated E & P, while current E & P (before distributions) was $75,000.

a. How much of the current and accumulated E&P will be allocated to each distribution?

b. How will Mantis distribution be treated?

c. How will Draxs distribution be treated?