Jack owns all 100 shares of Bronco Corporation stock. Jack's basis in his shares is $50,000 and Bronco's E&P is $100,000. Bronco redeems 25 shares of Jack's stock for $85,000. What is the consequences of this transaction. Jack's basis is reduced by $30,000 Jack receives an $85,000 dividend O Jack reports an $85,000 capital gain on the redemption of stock Bronco's E&P remains at $100,000