On January 1, Zeta Corporation has accumulated E & P of $40,000 and current E & P $360,000. During the year Zeta distributes $600,000 ($300,000 to each shareholder A & B) A has a basis in his stock $20,000 and B has a basis of $350,000 Calculate the effect of the distribution on A and B A B e &P 200,000 200,000 Dividend income 200,000 200,000 Remaining distribution 100,000 100,000 Basis 20,000 350,000 20,000 100,000 Return of capital Capital gain 80,000 0 a