Xco was formed in 20X3 and elected a calendar tax year. It elected S corporation status in 1980. On December 31, 20X4, Xco made a $50,000 distribution to its founder and sole shareholder, Tether. Xco had a previously taxed income account of $9,000 and $1,000 of accumulated earnings and profits at the time of the distribution. The accumulated adjustments account balance on January 1, 20X0 was zero. During 20X4, Xco earned $12,000 of ordinary income. Tether's basis on January 1, 20X4 was 10,000. How much income will Tether report from this S corporation in 20X4 and what is its character?