Gopher, Inc. has negative $$40,000$ current E&P and $$100,000$ of accumulated E&P$.$ Gopher made a $$70,000$ distribution at the end of the year. What is the character of the distribution?

Multiple choice question.

$$70,000$ dividend

$$70,000$ return of capital to the extent of basis

$$60,000$ dividend and $$10,000$ return of capital to the extent of basis

$$30,000$ dividend and $$40,000$ return of capital to the extend of basis