Longhorn Company reports current E&P of $140,000 in 20X3 and accumulated E&P at the beginning of the year of negative $280,000. Longhorn distributed $420,000 to its sole shareholder on January 1, 20X3. The shareholder's tax basis in his stock in Longhorn is $140,000. How is the distribution treated by the shareholder in 20X3? Multiple Choice $140,000 dividend. $140,000 dividend, $140,000 tax-free return of basis, and $140,000 capital gain. $140,000 dividend and $280,000 tax-free return of basis. $0 dividend, $140,000 tax-free return of basis, and $280,000 capital gain.