To the extent that a distribution to a shareholder exceeds the corporation's current and accumulated earnings and profits, how is such a distribution treated?

A)

The distribution is treated as a taxable event, and the shareholder recognizes it as a capital gain.

B)

The distribution is treated as a nontaxable return of capital.

C)

The distribution is treated as a nontaxable distribution of property.

D)

The distribution is treated as a taxable event, and the shareholder recognizes it as an ordinary gain.