On January 1, 2021, Kinney, Inc., an S corporation, reports $5,600 of accumulated E & P and a balance of $14,000 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 $7,000. Kinney distributes $8,400 to each shareholder on July 1, and it distributes another $4,200 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 $ X dividend income for the July 1 distribution and $ X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free distribution from AAA.