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What income do sweets and tammy recognize

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Problem 1: Tammy organized Sweets Corporation in January of the current year, and the corporation immediately elected to be an S corporation. Tammy, who contributed $40,000 in cash to start the business, owns 100% of the corporation's stock. Sweets' current year results are Ordinary income $36,000, Short-term capital loss $5,000. On July 10, Sweets makes a $10,000 cash distribution to Tammy. What income do Sweets and Tammy recognize as a result of the distribution?

Reference no: EM133004696

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