Blue Corporation, a calendar year taxpayer has accumulated E&P of $250,000 at the beginning of the year. Blues current E & P is $230,000. At the end of the year, Blue Distributes $600,000 ($200,000 each) to its three equal shareholders Pam, Jon, and Jones. Pams stock basis is $20,000, Jons is $35,000, and Jones is $100,000.

Determine how each shareholder will properly treat this distribution.