2. Kingbird Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Amata (550 shares) and Esteban (450 shares), who are unrelated individuals. Kingbird redeems 200 of Amata’s shares for $1,000 per share. Amata paid $300 per share for her Kingbird stock nine years ago. Which of the following statements is correct with respect to the stock redemption?
a. Amata has dividend income of $200,000.
b. Amata has a long-term capital gain of $140,000.
c. Amata’s basis in her remaining 350 shares is $60,000.
d. Kingbird reduces its E & P by $200,000.
e. None of the above.