What is the amount of the distribution

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Question - 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: EM131779301

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