Gopher made a $$70,000$ distribution on January $1$ of the current year. At the end of the current year, Gopher, Inc. has current E&P of negative $$40,000.$ Accumulated E&P at the beginning of the year was $$100,000.$ What is the character of the distribution?

Multiple choice question.

$$60,000$ dividend and $$10,000$ return of capital to the extend of basis

$$70,000$ dividend

$$30,000$ dividend and $$40,000$ return of capital to the extend of basis