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Problem - The Matthew Corporation, an S corporation, is equally owned by three shareholders-Emily, Alejandra, and Kristina. The corporation is on the calendar year basis for tax and financial purposes. On April 1 of the current year, Emily sold her one-third interest in the Matthew Corporation equally to the other two shareholders. For the current year, the corporation had nonseparately stated ordinary income of $900,000. For the current year, how much ordinary income should be allocated to Kristina on her Schedule K-1?
a. $25,000
b. $75,000
c. $337,500
d. $412,500
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