Rasputin owns 600 shares of the total outstanding stock of 800 shares for Magenta Company. His stock basis is $50,000. Rasputin, subsequently, sells 150 of his shares back to Magenta Company for $20,000. Magenta Company has E & P of $100,000. Rasputins sale of his stock to Magenta Corporation will be treated as (show work, as to why):

A) dividend income

B) a sale transaction

C) a return of capital

D) some other treatment

Please provide an explanation, thank you!