Elvis Owns All of the Stock of Shadow Corporation

Multiple Choice

Elvis owns all of the stock of Shadow Corporation.The accumulated earnings and profits of Shadow Corporation at the end of the year are a deficit of $12,000.The current earnings and profits are $25,000.Elvis' basis for his stock is $290,000.He receives a distribution of $340,000 on the last day of the tax year.How much dividend income and/or capital gain should Elvis report?

A) $0.
B) Dividend income of $13,000 and capital gain of $37,000.
C) Dividend income of $25,000 and capital gain of $25,000.
D) Dividend income of $0 and capital gain of $50,000.
E) None of the above.