14. Laverne owns 100% stock of the Pizza Bowl, Inc. (PB), which operates a classy combination bowling alley/pizza parlor. Her basis in the stock is $24,000. In its first year of existence, PB earned $30,000 of earnings and profits (E&P). One-half of this sum was earned from January thru June; the other half was earned July thru December. On July 1, PB distributed $40,000 in cash to Laverne. How will Laverne treat this distribution for tax purposes?

A. $40,000 dividend

B. $24,000 dividend and $16,000 reduction in basis

C. $15,000 dividend, $24,000 reduction in basis, and $1,000 gain

D. $15,000 dividend and $25,000 reduction in basis

E. $30,000 dividend and $10,000 reduction in basis

F. $24,000 reduction in basis and $16,000 gain