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Zebra, a C Corporation, distributes $40,000 to its sole shareholder, Alicia. At the time of the distribution, Zebra's total E&P is $28,000 and Alicia's gain

Zebra, a C Corporation, distributes $40,000 to its sole shareholder, Alicia. At the time of the distribution, Zebra's total E&P is $28,000 and Alicia's gain from this transaction is a

$12,000 capital gain.

$2,000 capital gain.

$40,000 capital gain.

$30,000 capital gain.

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