For the following scenarios identify the tax treatment to be recognized by the recipient of the distribution. Be sure to indicate the character of each, i.e. $3,000 dividend, $3,000 capital recovery and/or $3,000 capital gain, etc.

Gerald holds 95,000 shares of Interco, Inc., at a basis of $120,000. Interco has $80,000 of accumulated E&P and $40,000 of current E&P. Interco distributed 10,000 shares of its stock to Gerald in a proportionate distribution.