Assume that at the end of 2015, ABC, Inc. (an S corporation) distributes property (fair market value of $40,000, basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000). At the time of the distribution, ABC, Inc. has no corporate E&P and J. D. has a basis of $50,000 in his ABC, Inc. stock. How much income does J. D. recognize as a result of the distribution? $0 $5,000 $35,000. $40,000. None of these