Five Years Ago, Eleanor Transferred Property She Had Used in Her

Five years ago, Eleanor transferred property she had used in her sole proprietorship to Blue Corporation for 1,000 shares of Blue Corporation in a transaction that qualified under § 351.The assets had a tax basis to her of $100,000 and a fair market value of $270,000 on the date of the transfer.In the current year, Blue Corporation (E & P of $800,000) redeems 250 shares from Eleanor for $220,000 in a transaction that does not qualify for sale or exchange treatment.With respect to the redemption, Eleanor will have a:

A) $195,000 capital gain.
B) $220,000 capital gain.
C) $195,000 dividend.
D) $220,000 dividend.
E) None of the above.