At the start of the current year, Blue Corporation (a calendar year taxpayer) has accumulated E & P of $100,000. Blues current E & P is $60,000, and at the end of the year, it distributes $200,000 ($100,000 each) to its equal shareholders, Pam and Jon. Pams stock basis is $11,000; Jons stock basis is $26,000. How is the distribution treated for tax purposes?