Brothers a and B Each Owns 50 Percent of the Stock

Brothers A and B each owns 50 percent of the stock of P.P Corporation manufactures coats, and its wholly owned subsidiary, Q, manufactures ties.Q was acquired 20 years ago.During the current year, A and B squabbled over company policy and B decided he wanted to go his separate way.Accordingly, P distributed the stock of Q to B in exchange for all of B's stock in P, for which he had a basis of $15,000.The Q stock was worth $100,000.B will report

A) Dividend income of $ 100,000
B) Dividend income of $85,000
C) Capital gain of $85,000
D) No gain or loss
E) None of the above