Pirate Corp. has four equal shareholders. Each shareholder has a basis in their respective Pirate Corp. stock of $50,000. Pirate Corp. wished to transfer property in exchange for half of their outstanding stock. Pirate Corp has a basis in the property to be distributed to each shareholder of $40,000 and the property's FMV $75,000. As a result of this STOCK REDEMPTION: O Each shareholder will have to report dividend income equal to $75,000 and Pirate Corp. will recognize a gain of $25,000 for each piece of property. Each shareholder will have to report capital gain of $25,000 and Pirate Corp. will recognize a gain of $25,000 for each piece of property. O Each shareholder will have to report capital gain of $25,000 and Pirate Corp. will recognize a gain of $35,000 for each piece of property. Each shareholder will have to report dividend income equal to $75,000 and Pirate Corp. will recognize a gain of $35,000 for each piece of property.