Greg is the sole shareholder of X Corp. On 12-1-X1, X Corp. declares $100,000 in stock dividends to shareholders of record as of 12-15-X1, paid 12-31-X1. Throughout this time, Corp. X has Earnings and Profits of $40,000, Greg's basis in the X Corp. stock is $50,000 and Greg did not have the stock long enough to classify it as "qualifying stock". Which of the following is correct?

A. Greg realizes and recognizes $0.00 dividend income. B. Greg realizes and recognizes $100,000 in dividend income. C. Greg recognizes capital gain of $40,000 as short term or long term depending on how long Greg owned the stock, and recognizes dividend income of $10,000 .Greg also has a return of capital of $50,000 that is taxable income. D. Greg realizes dividend income of $40,000, and realizes capital gain of $10,000 as short term or long term depending on how long Greg owned the stock. Greg also has a return of capital of $50,000 that is recognized as taxable income. E. Greg recognizes dividend income of $40,000, and recognizes capital gain of $10,000 as short term or long term depending on how long Greg owned the stock. Greg also has a return of capital of $50,000 that is not recognized as taxable income.

F. None of the other choices are correct.