C, an individual, owns 80 of the 100 shares of T Corporation stock outstanding while the remaining shares are owned by unrelated parties. T’s basis in the 80 shares is $1,600, or $20 per share. This year T redeemed 10 shares of C for $4,000. Assuming the redemption does not qualify for sale treatment and T has substantial E&P, C’s dividend income and basis in his remaining shares will be

a. A dividend of $4,000 and a basis of $1,600.

b. A dividend of $3,800 and a basis of $1,400.

c. A dividend of $4,000 and a basis of $1,400.

d. A dividend of $3,800 and a basis of $1,600.

e. None of the above