3. Dr. Gasper owns 100% of stock of the C corporation Texas Cheesecake Depository, Inc. (Cheesecake). Cheesecake has total E&P of $20,000 and Gasper has a basis of $100,000 in his Cheesecake stock prior to the following distribution. Cheesecake makes a nonliquidating distribution to Gasper of land held for investment. The land has a $90,000 adjusted basis and a fair market value of $400,000 at the time of the distribution. What is the amount and character of Gasper income from this distribution?

A. $0 income

B. $400,000 ordinary income

C. $20,000 dividend; $380,000 capital gain

D. $20,000 dividend; $100,000 return of basis; $280,000 capital gain

E. $330,000 dividend; $70,000 return of basis; $0 capital gain

F. $400,000 dividend

G. None of the above (some other amount/character is correct)