QUESTION #$7$

$5$ years after its formation, Up the Hill Corporation wants to pay dividends to its shareholders Jack and Jill. On $1/1$ Year $6,$ it has accumulated E&P of $$50,000,$ and on $12/31$ it has current E&P of $$50,000.$ It distributes property dividend of FMV $$10,000$; AB $$20,000$ to Jack and Jill at end of year. Jack and Jill each have a basis of $$10,000$ in their UTH stock.

A$)$ What is the amount of the property dividend to Jack and to Jill?

B$)$ How much of the property dividend is taxable to each, and what if any other consequences result?