Nail Corporation made a distribution of $541,310 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 $209 per share. Rusty's tax basis in the shares was $50 per share. Nail had total E&P of $8,060,000 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