Currently, Brown Corporation (E & P of $800,000) Has 1,000

Currently, Brown Corporation (E & P of $800,000) has 1,000 shares of common stock outstanding. Pat owns 200 shares. His wife owns 400 shares, his daughter owns 100 shares, and his father owns 300 shares. Two years ago, Pat transferred $30,000 to Brown Corporation in exchange for 100 newly issued shares of nonvoting preferred stock. In the current year, Brown Corporation redeems Pat's preferred stock for $50,000, its fair market value. With respect to the distribution in redemption of the preferred stock:

A) Pat has dividend income of $20,000.
B) Pat has dividend income of $50,000.
C) Pat has a long-term capital gain of $20,000.
D) Pat has a long-term capital gain of $50,000.
E) None of the above.