Marie received Preferred Stock as a Non-Taxable Common Stock Dividend in 2019 from Ella Corporation. The value of the Preferred Stock when received by Marie was $40,000 and the value of the Common Stock owned by Marle was $20,000 Marie acquired the Common Stock in 2017 for 590.000 and Ella Corporation's Earnings And Profits (E&P) was $50,000 on the date of distribution of the Preferred Stock Six (6) months after the receipt of the Preferred Stock, Marie sold the Preferred Stock to an unrelated third party for $120,000. As a result of the sale of the Preferred Stock, Marle has Ordinary Income of $40,000, a Tax-Free Return of Capital of $60,000 and a Long-Term Capital Gain of $20.000 Ordinary Income of $40.000 and a Tax-Free Return of Capital of 580,000 Ordinary Income of $120,000 Long-Term Capital Gain of $60,000