Rocky Corporation, an S Corporation, Reports the Following Results for the Current

Rocky Corporation, an S corporation, reports the following results for the current year: $\begin{array}{lr}\text { Ordinary income } & \$ 70,000 \\\text { Long- term capital gain } & 20,000 \\\text { Municipal bond interest income } & 10,000 \\\text { Domestic corporate dividends } & 6,000 \\\text { Charitable contributions } & 16,000\end{array}$ Rocky's AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000, respectively. makes a $100,000 cash distribution to its sole shareholder on June 1 and a second $100,000 cash distribution on D
1. The shareholder's basis for Rocky stock on January 1 was $120,000. Discuss the tax consequences of these transactions.