Manny Corporation redeems 200 shares of its stock for $100,000 from Moe, who inherited the stock from his father, Jack. The stock's FMV on Jack's date of death was $90,000. Jack's basis in the stock was $40,000. Manny Corporation had an E&P balance of $300,000. If the redemption qualifies under Sec. 303, Junior will recognize dividend income of $50,000 and a capital gain of $10,000. recognize $100,000 in dividend income. recognize a capital gain of $60,000. recognize a capital gain of $10,000.