At December 31, Year 1, the EKU Corp. had $50,000 accumulated earnings and profits plus the current earnings and profits of $20,000 (before distributions). This tax year EKU Corp. made a distribution of old recreation equipment with a fair market value of $200,000 to its sole shareholder, Mr. Colonel. He had a basis in the corporation of $50,000.

		$200,000 Dividend
		$70,000 Dividend, $130,000 Capital Gain
		$20,000 Dividend, $50,000 Capital Gain, $80,000 Return of Capital
		$70,000 Dividend, $50,000 Return of Capital, $80,000 Capital Gain
		$20,000 Dividend, $50,000 Capital Gain, $50,000 Return of Capital, $80,000 Capital Gain