Candy Corp. is a C Corporation that began operations in Year 1. Candy Corp.s Year 1 through Year 3 taxable earnings and profits are as follows: Year E & P 1 ($25,000) 2 5,000 3 10,000 On the last day of Year 3, Candy Corp. makes a $12,500 cash shareholder distribution, distributed equally among its two shareholders, Goode and Plenteau. How much of Goodes distribution is a nontaxable return of capital? Assume sufficient basis in Goodes stock investment.

a $0

b. $5,000

c. $1,250

d. $6,250