In the current year, Boone inherited 100% of Cane Corporation's outstanding stock from his mother. The stock had a fair market value of $500,000 at the date of death and was reflected on Cane's balance sheet as follows:

Cash

$500,000

Capital stock

300,000

Accumulated earnings & profits

200,000

• Boone immediately withdrew $100,000 out of Cane Corporation as a dividend distribution. Later in the year, pursuant to a plan of liquidation, Boone withdrew the remaining $400,000 out of Cane. For the current year, how much will Boone be required to report as ordinary dividend income and capital gain or loss?Ordinary Dividend
• Capital Gain or Loss
• A.
• $200,000
• $200,000
• B.
• $0
• $0
• C.
• $100,000
• $100,000
• D.
• $100,000
• $500,000