5. Aaron and Michele, equal shareholders in Cavalier Corporation, receive $25,000 each in distributions on December 31 of the current year. During the current year, Cavalier sold an appreciated asset for $60,000 (basis of $15,000). Payment for the sale of the asset will be made as follows: 50% next year and 50% in the following year with interest payable at a rate of 6 percent. Before considering the effect of the asset sale, Cavaliers current-year E & P is $40,000 and it has no accumulated E & P. How much of Aarons distribution will be taxed as a dividend? a. $0 b. $20,000 c. $25,000 d. $42,500