Carol,Bonnie,and Ann,sisters,own 400 Shares,400 Shares,and 200 Shares,respectively,in Teal Corporation (E

Carol,Bonnie,and Ann,sisters,own 400 shares,400 shares,and 200 shares,respectively,in Teal Corporation (E & P of $800,000) .Teal Corporation redeems all of Ann's stock for $120,000.Ann paid $50 a share for the stock five years ago.Ann continued to serve as president of Teal after the redemption.With respect to the redemption:

A) Ann has a long-term capital gain of $120,000.
B) Ann has a long-term capital gain of $110,000.
C) Ann has dividend income of $120,000.
D) Ann has dividend income of $110,000.
E) None of the above.