35. B and S, two individuals, who are brother and sister and each own 50 shares of X Corporation (100 total shares outstanding).X has accumulated E&P of $800,000 at the beginning of the year.B and S each sit on the board of directors of X and earn a salary based on corporate earnings.B's adjusted basis in B's 50 shares of X is $1,000 per share.S'adjusted basis in S 50 shares of X stock is $5,000 per share.During the year X redeems all of B's shares for $350,000 cash.(This was X' only transaction during the year). a. What income, gain, or loss does B recognize as a result of the redemption? b. What is X' E&P at the beginning of the next year