Paris Corporation Has a Deficit in Accumulated E & P

Paris Corporation has a deficit in accumulated E & P of $60,000.For 2009, it has current E & P of $40,000.On March 31, 2009, Paris distributes $65,000 to its sole shareholder, Jennifer.Jennifer has a basis of $10,000 in her stock in Paris Corporation.

A) Jennifer has dividend income of $65,000.
B) Jennifer has dividend income of $40,000, reduces her stock basis to zero, and has a capital gain of $15,000.
C) Jennifer has dividend income of $40,000 and reduces her stock basis to $5,000.
D) Jennifer has no dividend income, reduces her stock basis to zero, and has a capital gain of $10,000.
E) None of the above.