Star Corporation has a deficit in accumulated E & P of $260,000 and has current E & P of $223,000. On July 1, Star distributes $249,000 to its sole shareholder, Bob, who has a basis in his stock of $44,500. As a result of the distribution,Bob has:

Dividend income of $223,000 and reduces his stock basis to $18,500.
	None of these.
	No dividend income, reduces his stock basis to zero, and has a capital gain of $249,000.
	Dividend income of $44,500 and reduces his stock basis to zero.