$7.$ Richmond Corporation, which is owned equally by four individual shareholders, owns all of the stock of Arlington Corporation. The Arlington stock was acquired eight years ago. This year, when the stock had a fair market value of $$80,000$ and an adjusted basis of $$20,000,$ Richmond distributed the Arlington stock equally to the four shareholders as part of a spinoff transaction. At the time of the distribution Richmond had $$120,000$ of undistributed earnings and profits. What amount and type of income will each of the shareholders recognize as a result of the distribution?

a$.$ $$20,000$ dividend income

b$.$ $$20,000$ capital gain

c$.$ $$15,000$ capital gain

d$.$ $$0$

$10.$ McIntyre Corporation is owned by three shareholders. During the current year, McIntyre reported the following:

Rental income $ $200,000$

Dividend income $20,000$

Depreciation expense on the rental property $40,000$

Property taxes on the rental property $10,000$

Interest expense on the mortgage on the rental property $50,000$

What are McIntyre$$s adjusted ordinary gross income $($AOGI$)$ and personal holding company income $($PHCI$)?$

a$.$ $$120,000$ AOGI and $$20,000$ PHCI

b$.$ $$220,000$ AOGI and $$120,000$ PHCI

c$.$ $$120,000$ AOGI and $$120,000$ PHCI

d$.$ $$220,000$ AOGI and $$220,000$ PHCI