Roger and Stacey are the sole shareholders of Gator Corporation. Roger and Stacey each have a basis of $100,000 in their 2,000 shares of Gator common stock. When its E \& P was $700,000, Gator Corporation issued a preferred stock dividend on the common shares of Roger and Stacey, giving each 1,000 shares of preferred stock with a par value of $100 per share. At the time of the stock dividend, fair market value of one share of common stock was $150 and fair market value of one share of preferred stock was $75. 1. What are the tax consequences of the distribution to Roger and Stacey? 2. What are the tax consequences to Roger if he later sells his preferred stock to Steven for $75,000 ? Steven is not related to Roger. 3. What are the tax consequences if, instead of Roger selling the preferred stock to Steven, Gator Corporation redeems the stock from Roger for $75,000 ? Assume that Gator's E \& P at the time of the redemption is $650,000