Moss Corporation has a single class of common stock outstanding. Tanya owns 1,000 shares, which she purchased five years ago for $170,000. Moss declares a stock dividend payable in 8% preferred stock having a $230 par value. Each shareholder receives one share of preferred stock for ten shares of common stock. On the distribution

dateDecember 16 of the current yearthe common stock was worth $437 per share, and the preferred stock was worth $230 per share. On April 1 of the current year, Tanya sells half of her preferred stock for $8,500.

Requirement a. How much income must Tanya recognize when she receives the stock dividend?

Tanya will recognize

$

in income when she receives the stock dividend.

Requirement b. How much gain or loss must Tanya recognize when she sells the preferred stock? (Ignore the implications of Sec. 306.) (Do not round intermediary calculations. Only round the amount you input in the cells to the nearest cent. Use parentheses or a minus sign for a loss.)

Selling price	-	Basis of stock	=	Amount recognized
	-		=

Requirement c. What is Tanya basis in her remaining common and preferred shares after the sale? When does her holding period for the preferred shares begin? (Do not round interim calculations and round your final answer to the nearestcent.)

Tanya common share basis is $		and her remaining preferred share basis is $		. Her holding
period for the preferred shares			.