5 years after its formation, Up the Hill Corporation wants to pay dividends to its shareholders Jack and Jill. On 1/1 Year 6, it has accumulated E&P of $50,000, and on 12/31 it has current E&P of $50,000. It distributes property dividend of FMV $10,000; AB $20,000 to Jack and Jill at end of year.

1. What is the amount of the property dividend to Jack and Jill? and How much of the property dividend is taxable?
2. What is Jack and Jills basis in the property? and What is the effect to UTHs current and accumulated E&P? Then What is accumulated E&P on 1/1, Year 7?