Peach Tree Corp. has accumulated earnings and profits (E\&P) of $1,960,000 and no current E\&P for the current year. On December 31st Peach Tree Corp. distributes to Grape, its sole shareholder a parcel of land with a basis of $1,820,000 and a fair market value of $1,400,000. Grape's basis in the stock is $700,000. Grape plans on growing fruit trees on this land. What portion of the distribution to Grape will be treated as a dividend? Note: do not adjust earnings and profits for the tax effect of any gains or losses due to the distribution. $700,000 $1,820,000 $420,000 $1,400,000