Bruin Company reports current E&P of $390,000 in 20X3 and accumulated E&P at the beginning of the year of $195,000. Bruin distributed $590,000 to its sole shareholder on January 1, 20X3. How much of the distribution is treated as a dividend in 20X3?

A. 590,000

B. 390,000

C. 195,000

D. 586,000

Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for stock exchange. In exchange, he received stock in Apricot with a fair market value of $402,500. Julian's tax basis in the Lemon stock was $805,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?

A. No loss recognized and a basis in Apricot stock of $805,000.

B. $402,500 loss recognized and a basis in Apricot stock of $402,500.

C. No loss recognized and a basis in Apricot stock of $402,500.

D. $402,500 loss recognized and a basis in Apricot stock of $805,000.