Which of the following statements is correct regarding the treatment of dividends paid by X to E on E's stock after it was transferred to E on November 1, 20x1?
A) Dividends paid by X to E on E's stock after it was transferred to E on November 1, 20x1, are taxable to E as additional compensation during the period E's stock is substantially nonvested, and are deductible as such by X.
B) Dividends paid by X to E on E's stock after it was transferred to E on November 1, 20x1, are taxable to E as dividend income.
C) Dividends paid by X to E on E's stock are deductible as additional compensation, with such deduction commencing upon the vesting of ownership by E.