Sanderson Inc. reports negative current E&P of ($900,000) and positive accumulated E&P of $700,000. Sanderson Inc. distributes $500,000 to its sole shareholder, Winnie on April 30, 2021. Winnies tax basis in her stock is $300,000.

Question: How much of the $500,000 distribution is treated as dividend income to Winnie?

a. $0

b. $300,000

c. $400,000

d. $500,000