What is the amount of the distribution

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The books and records of May Inc., a calendar year S corporation, reflect the following information for 2010:

Accumulated adjustments account (1/1/10): $60,000
Accumulated earnings and profits (1/1/10): $50,000
Ordinary Income for 2010: $204,000

May Inc., has one shareholder,Paula, whose basis in May's stock was $100,000 on 1/1/10. During 2010, May distributed $300,000 to Paula. What is the amount of the distribution that would be treated as a dividend by Paula?

a. 0
b. 36,000
c. 264,000
d. 300,000
e. none of the above

Reference no: EM13143662

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