Exercise 20-29 (Algorithmic) (LO. 7) In 2019, Emily receives a distribution of $219,200 from her wholly owned calendar year corporation. As of January 1, 2019, the corporation has accumulated E & P of $21,920 and for 2019 has current E & P of $109,600. Emily's basis in her stock is $54,800. Answer the following to indicate the character of the distribution to Emily. Emily will recognize the $219,200 distribution as follows: 54,800 x Dividend income: Return of capital: $ 54,800 x Capital gain: Feedback V Check My Work The term earnings and profits is not defined in the Code, but 312 does include certain transactions that affect E & P. Although E & P and the accounting concept of retained earnings have certain similarities, they differ in numerous respects. Accumulated E & P is the sum of the corporation's prior current E & P that has not been distributed as dividends