At the end of the year, before distributions, Miami Corp. (an s corporation) has an accumulated adjustments account (AAA) balance of $19,800 and accumulated E&P of $26,000 from previous years as a C corporation. During the year, JLo (a 40 percent shareholder) received a $26,000 distribution (the remaining shareholders received $39,000 in distributions). Assume JLo's stock basis is $52,000 after considering her share of Miami Corp.'s income for the year but before considering the effect of the distribution. Required: a. What is the amount and character of gain JLo must recognize from the distribution? b. What is her basis in her Miami Corp. stock at the end of the year? Character Amount a. Dividend 10,400 15,600 Return of capital b. Basis