[2] TP Corporation has 1,000 shares outstanding. Shawn owns 900 shares; Shawns brother, Robert, 25 shares; and Shawns nephew, Frisco, 75 shares. TP redeems 650 shares of Shawns stock for $100,000. Shawns basis in his shares prior to redemption is $90,000. TPs earnings and profits on the date of redemption were $80,000. Assuming the redemption is not a partial liquidation, what is Shawns recognized gain and his basis in his stock after the redemption?

A. $10,000 capital gain; $0 basis in stock.

B. $80,000 dividend; $70,000 basis in stock.

C. $100,000 dividend; $90,000 basis in stock.

D. $40,000 capital gain; $40,000 basis in stock.