ABC Corporation's beginning balance of accumulated earnings and profits is a deficit of $100,000. It had current earnings and profits of $24,000. On April 1, the Corporation distributed $40,000 to its sole shareholder, R, who had a basis in his stock of $30,000. R will report

a dividend of $24,000and return of capital of $16,000

a dividend of $40,000

a dividend of $8,000 , return of $30,000 and capital gain of $2,000

no dividend income , return of capital of $30,000 and capital gain of $10,000