Hoover Corporation distributes property to its sole shareholder, Andre. The property has a fair market value of $350,000, an adjusted basis of $205,000, and is subject to a liability of $220,000. Current E & P is $500,000. With respect to the distribution, which of the following statements is correct?

Select one:

A. Hoover has a gain of $15,000 and Andre has dividend income of $350,000.

B. Hoover has a gain of $145,000 and Andre's basis in the distributed property is $130,000.

C. Hoover has a gain of $130,000 and Andre's basis in the distributed property is $350,000.

D. Hoover has a gain of $145,000 and Andre has dividend income of $130,000.

E. None of the above.