2. Luke is the sole shareholder of Rider Corporation. The basis of his stock is $80,000. Rider distributes $270,000 to Luke in 20X8. Earnings and profits for Rider are $120,000. Which of the following statements is true regarding this distribution? a. Luke will report $120,000 dividend in 20X8 with a remaining stock basis of $80,000. b. Luke will report $190,000 dividend in 20X8 with a remaining stock basis of zero. c. Luke will report $120,000 dividend and $70,000 capital gain in 20X8. d. Luke will report a $190,000 capital gain in 20X8. e. None of the answers provided is correct. OK 80K)

2. Luke is the sole shareholder of Rider Corporation. The basis of his stock is $80,000. Rider distributes $270,000 to Luke in 208. Earnings and profits for Rider are $120,000. Which of the following statements is true regarding this distribution? a. Luke will report $120,000 dividend in 208 with a remaining stock basis of $80,000. b. Luke will report $190,000 dividend in 208 with a remaining stock basis of zero. c. Luke will report $120,000 dividend and $70,000 capital gain in 208, d. Luke will report a $190,000 capital gain in 208. e. None of the answers provided is correct