Hector formed H Corporation as a C corporation at the beginning of 2022. Hector was the sole shareholder of H Corporation. H Corporation reported 2022 taxable income (and earnings and profits) of $200,000. At the beginning of 2023, H Corporation elected S corporation status. During 2023, H Corporation had a rough year, reporting an ordinary business loss of $70,000, $4,000 of dividend income, and $3,000 of interest income. H Corporation also distributed $15,000 to Hector.

What is the amount and character of gain/income Hector must recognize on the distribution (if any)?

What is the balance in H Corporation's accumulated adjustments account (AAA) at the end of 2023