1. Allan owns all of the stock of Cady Co. The stocks basis is $100,000. Cady Co has a total of current and accumulated earnings and profits of $50,000. CadyCo distributes $200,000 cash to Allan with respect to his stock (i.e., as a state law dividend). How is the $200,000 taxed? What is Allans stock basis after the distribution? Alternatively, CadyCo distributes to Allan his note to Cady Co for $200,000 borrowed from CadyCo.