At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $38,450. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $57,675 to its sole shareholder, Abby, whose stock basis is $11,535. How does the Federal income tax law treat this distribution?

Dividend income: $ Return of capital: $ Capital gain: $ Stock basis after the distribution: $