The Williamson Estate Generated Distributable Net Income (DNI) This Year

The Williamson Estate generated distributable net income (DNI) this year of $120,000, one-third of which was tax-exempt interest, and the balance of which was long-term capital gain. Muffy Williamson, the sole income beneficiary of the estate, received a distribution of the entire $150,000 accounting income of the entity. How is this distribution accounted for by Muffy?

A) $150,000 ordinary income.
B) $120,000 ordinary income.
C) $80,000 long-term capital gain, $40,000 exempt interest.
D) $100,000 long-term capital gain, $50,000 exempt interest.