Kinney, Inc., an electing S corporation, holds $$5,000$ of AEP and $$9,000$ in AAA at the beginning of the calendar tax year. Kinney has two shareholders, Eric and Maria, each of whom owns $500$ shares of Kinney's stock. Kinney's taxable income is $$6,000$ for the year. Kinney distributes $$6,000$ to each shareholder on February $1,$ and it distributes another $$3,000$ to each shareholder on September $1.$ How is Eric taxed on the distribution?

a$.$ $$1,000$ dividend income.

b$.$ $$500$ dividend income.

c$.$ $$3,000$ dividend income.

d$.$ $$1,500$ dividend income.

The answer to the question above is the ff:

The distribution of $$6,000$ on February $1$ is considered a dividend to the extent of Kinney's accumulated earnings and profits $($AEP$),$ which is $$5,000.$ The remaining $$1,000($$$6,000-$ $$5,000)$ is a return of capital, which reduces the shareholder's basis.

Therefore, Eric's dividend income from the February $1$ distribution is $$1,000($$$6,000$ AEP distribution$),$ and his dividend income from the September $1$ distribution is $$500($$$3,000$ AEP distribution$).$

The total dividend income for Eric is $$1,500($$$1,000+$ $$500).$

I would like to know where did the $$500,$ the one being dded to $1,000/$ the one from the dividend income from the Septmeber $1$ distribution