Rocky Corporation, an S corporation, reports the following results for the current year

Ordinary income: $60,000

Long-term capital gain: $20,000

Municipal bond interest income: $10,000

Rocky's AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000, respectively. Rocky makes a $200,000 cash distribution to its sole shareholder during the year. The shareholder's basis for Rocky stock on January 1 was $120,000. How much of the distribution will be taxable?

A. $0

B. $40,000

C. $50,000

D. $80,000