Sole shareholder of a calendar

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During 2010, Shirley Nutt, the sole shareholder of a calendar year S corporation, received a distribution of $16,000. On December 31, 2009, her stock basis was $4,000. The corporation earned $11,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?

a. Nutt recognizes a $1,000 LTCG.

b. Nutt's stock basis will be $2,000.

c. Nutt's ordinary income is $15,000.

d. Nutt's return of capital is $11,000.

e. None of the above.

Reference no: EM13120825

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