Pleasant Value Inc. has two shareholders, Abe and Sadie. Abe’s basis in his stock is $1,000 and Sadie’s basis in her stock is also $1,000. Pleasant Value has $2,000 in accumulated earnings and profits and $1,000 in current earnings and profits at the end of the year. Pleasant Value distributes $2,500 to Abe in March and $2,500 to Sadie in June. Discuss the tax consequences of the distribution to each of the shareholders.