Lee, Inc., an S corporation, has the following: Accumulated adjustments account Previously taxed income Earnings and profits Other adjustments account $20,000 15,000 30,000 2,000 Tom, who owns 100% of Lee, Inc., has a stock basis of $38,000. Tom receives a distribution of $70,000. How is the distribution taxed? O A. Capital gain: $35,000 O B. Dividend income: $28,000; Capital gain: $4,000 C. Dividend income: $30,000; Capital gain: $2,000