Austin Company Reports Positive Current E&P of $225,000 and a Deficit

Essay

Austin Company reports positive current E&P of $225,000 and a deficit in accumulated E&P of ($350,000). Austin distributed $280,000 to its sole shareholder, Betsy Bevo, on December 31, 20X3. Betsy's tax basis in her stock is $140,000. How much of the $280,000 distribution is treated as a dividend to Betsy, and what is her tax basis in Austin stock after the distribution?