QUESTION 27 Jessica Corporation was organized ten (10) years ago as a Grocery operation. Eight (8) years ago, Jessica Corporation began to operate a separate Steel Manufacturing division. Due to a slow down in the steel business, Jessica Corporation discontinues the Steel Manufacturing division. Jessica Corporation sells the assets of the Steel Manufacturing division for $1,600,000 and distributes the proceeds equally to its two (2) equal shareholders, Hazel, an individual, and Joubert Corporation. Both Hazel and Joubert Corporation have a basis in the redeemed stock of $300,000 each which both acquired ten (10) years ago. Jessica Corporation continues to operate the retail Grocery operation. Jessica Corporation has Eamings And Profits (E&P) of $4,000,000 at the time of the distribution. As a result of the distribution, which of the following is the correct tax treatment for Hazel? O Hazel has a Long-Term Capital Gain of $500,000. O Hazel has a Long-Term Capital gain of $1,300,000. Hazel has Dividend Income of $800,000. Hazel has Dividend Income of $160,000.