On January 1, 2020, Kinney, Inc., an S corporation, reports $11,200 of accumulated E & P and a balance of $28,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $14,000. Kinney distributes $16,800 to each shareholder on July 1, and it distributes another $8,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ o x dividend income for the July 1 distribution and s 0 X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, both Erin and Frank each receive a tax-free 0 X distribution from AAA