Rhonda owns all 100 shares of Cosmic Corporation stock. Her stock basis is $40,000. On December 1 of the current year, Cosmic distributes 50 shares of preferred stock to Rhonda in a nontaxable distribution. In the year of the distribution, Cosmic's total E&P is $90,000, the preferred shares are worth $165,000, and the common shares are worth $385,000. Read the requirements. Requirement a. What are the tax consequences to Rhonda and to Cosmic if Rhonda sells her preferred stock to Jerry for $152,000 on January 10 of the following year? In that year, Cosmic's current E&P is $45,000 (in addition to the $90,000 balance from the prior year) Begin by computing the tax consequences to Rhonda. Dividend Return of capital Capital gain Cosmic Corporation Requirement b. How would your answer to Part a change if Rhonda sells her preferred stock to Jerry for $95,000 instead of $152,000? is a deemed dividend and is a return of capital. Rhonda's remaining basis is Cosmic Corporation Requirement c. How would your answer to Part a change if Cosmic redeems Rhonda's preferred stock for $149,000 on January 10 of the following year? Begin by computing the tax consequences to Rhonda. Dividend Return of capital Capital gain Cosmic Corporation