Cryer Corporation has outstanding 400 shares of common stock of which Alex, Barb, Carrie, and Dana each own 100 shares.The shareholders are not related to each other and no stock is considered constructively owned by Alex, Barb, Carrie, or Dana.In one transaction, Cryer Corporation redeems 20 shares from Alex, 25 shares from Barb, and 55 shares from Carrie.Cryer Corporation had earnings and profits of $150,000 on the date of the redemption.

To accomplish the redemption, Cryer distributed equipment with a fair market value of $2,000 and an adjusted basis of $1,200 to redeem the 20 shares that had cost Alex $1,600; distributed inventory with a fair market value of $2,500 and an adjusted basis of $2,800 to redeem the 25 shares that had cost Barb $2,000; and, distributed office furniture with a fair market value of $5,500 and an adjusted basis of $2,300 to redeem the 55 shares that had cost Carrie $4,400.Alex, Barb, and Carrie had purchased their Cryer Corporation stock more than one year ago.

For items 1 through 3 select the correct amount and type of income to be reported by each of the redeemed shareholders.A tax treatment may be selected once, more than once, or not at all.

Tax treatments

2.How much and what type of income must be recognized by Barb as the result of the redemption of her twenty-five shares?