Nail Corporation made a distribution of $$589,110$ to Rusty in partial liquidation of the company on December $31$ of this year. Rusty, an individual, owns $100$ percent of Nail Corporation. The distribution was in exchange for $50$ percent of Rusty's stock in the company. At the time of the distribution, the shares had a fair market value of $$219$ per share. Rusty's tax basis in the shares was $$50$ per share. Nail had total E&P of $$8,485,000$ at the time of the distribution.

a$.$ What are the amount and character $($capital gain or dividend$)$ of any income or gain recognized by Rusty because of the partial liquidation?

Capital gain$/$ Dividend $......../$ per share

b$.$ Assuming Nail made no other distributions to Rusty during the year, by what amount does Nail reduce its total E&P because of the partial liquidation?