At the beginning of the current year, both Edmund and Bryant own 50% of Brown Corporation.

In July, Edmund sold his stock to Chris for $110,000. At the beginning of the year, Brown Corporation had accumulated E & P of $200,000 and its current E & P is $250,000 (prior to any distributions).

Brown distributed $260,000 on March 1 ($130,000 to Edmund and $130,000 to John) and distributed another $260,000 on October 1 ($130,000 to Chris and $130,000 to John).

What are the tax implications of the $130,000 distribution to Chris?