Corporation S is an S Corporation which elects S status effective January a of the tax year specified for the exam. Sole shareholder J has a basis of $400,000 in his stock. At the same time, S has $200,000 in accumulated earnings and profits. For the same tax year, S has the following items of income and expense:

Gross Business Income $250,000

Dividend income $150,000

Business expenses $100,000

Expenses related to Dividends $50,000

a. J has non-separately stated income of $150,000 and dividend income of $100,000

b. J has non-separately stated income of $150,000 and dividend income of $83,333.

c. Neither of the above.

please explain why you choose this answer. Thank you.