As of January 1 of the current year,Grouse Corporation has E & P of $600,000.Fumiko owns 320 shares of Grouse's common stock (basis of $45,000).On that date,Grouse Corporation declares and distributes a nontaxable preferred stock dividend,of which Fumiko receives 100 shares.Immediately after the stock dividend,the fair market value of one share of Grouse common stock is $500,and the fair market value of one share of Grouse preferred stock is $200.Two months later,Fumiko sells the 100 shares of preferred stock to an unrelated individual for $20,000.

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The Answer of As of January 1 of the current year,Grouse Corporation has E & P of $600,000.Fumiko owns 320 shares of Grouse's common stock (basis of $45,000).On that date,Grouse Corporation declares and distributes a nontaxable preferred stock dividend,of which Fumiko receives 100 shares.Immediately after the stock dividend,the fair market value of one share of Grouse common stock is $500,and the fair market value of one share of Grouse preferred stock is $200.Two months later,Fumiko sells the 100 shares of preferred stock to an unrelated individual for $20,000.

As of January 1 of the Current Year,Grouse Corporation Has