During 2008,Houston Nutt,the Sole Shareholder of a Calendar Year S

During 2008,Houston Nutt,the sole shareholder of a calendar year S corporation,received a distribution of $16,000.On December 31,2007,his 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.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free