Peggy, Mildred and Shirley, sisters, own thirty (30) shares, thirty (30) shares and forty (40) shares of stock, respectively, in Dorothy Corporation. Dorothy Corporation has Earnings And Profits (E&P) of $500,000. Dorothy Corporation redeems ten (10) shares of Shirley's stock for $60,000. Shirley paid $300 a share for the stock five (5) years ago. With respect to the Redemption, which of the following is correct? Shirley has a Long-Term Capital Gain of $60,000. Shirley has a Long-Term Capital Gain of $54,000. Shirley has Taxable Dividend Income of $54,000. Shirley has Taxable Dividend Income of $60,000. QUESTION 29 Zoe, an individual, received Preferred Stock as a Nontaxable Stock Dividend on the Common Stock she has held as an investment for four (4) years in Jawdat Corporation. The stock had a Section 306 Taint of $200,000 and Zoe properly allocated a basis of $40,000 to the Preferred Stock. One (1) month after receiving the Nontaxable Stock Dividend, Zoe sells the Preferred Stock to Escobar (an unrelated party) for $270,000. Under these circumstances, which of the following is correct? O Zoe has Ordinary Income of $200,000 and a Long-Term Capital Gain of $30,000. O Zoe has Ordinary Income of $270,000. Zoe has Ordinary Income of $245,000 and a Tax-Free Return Of Capital of $25,000. Zoe has Ordinary Income of $230,000 and a Long-Term Capital Gain of $40,000.