LO.1, 3 Mike, the sole shareholder of Daffodil Corporation, sold his Daffodil stock to Steve on July 30 for $200,000. Mike’s basis in the stock was $150,000 at the beginning of the year. Daffodil had accumulated E & P of $110,000 on January 1 and current E & P of $170,000. During the year, Daffodil made the following distributions: $300,000 cash to Mike on July 1 and $100,000 cash to Steve on December