XYZ Inc. has two categories of outstanding stocks common stock and nonvoting preferred stock both listed on the New York Stock Exchange. The specific share quantities for each class are not pertinent to the current matter. The board of directors at XYZ authorized the disbursement of cash dividends as follows in 2022:

**Common Stock**

- January 2: $10 million - April 1: $5 million - July 1: $5 million - October 1: $25 million

**Preferred Stock**

- March 15: $15 million - July 1: $16 million - September 15: $18 million - October 1: $20 million

As of January 1, 2022, XYZ held accumulated Earnings and Profits (E&P) totaling $50 million. On June 30, 2022, XYZ incurred an ordinary loss of approximately $70 million, which was also reflected in the calendar year-end 2022 tax return. XYZ operates on a calendar-year basis, and this loss led to a $30 million deficit in the current (2022) E&P.

Issue

Explain and justify the analysis of how much, if any, of XYZ's 2022 dividends should be designated as "ordinary dividends" (Form 1099-DIV, Box 1a), and how much, if any, should be classified as "Nondividend distributions" (Form 1099-DIV, Box 3), considering the impact of the recognized loss on the company's E&P.