Kinney, Inc

question 18

Multiple Choice

Kinney, Inc., an electing S corporation, holds $5,000 of AEP and $9,000 in AAA at the beginning of the calendar tax year. Kinney has two shareholders, Eric and Maria, each of whom owns 500 shares of Kinney's stock. Kinney's taxable income is $6,000 for the year. Kinney distributes $6,000 to each shareholder on February 1, and it distributes another $3,000 to each shareholder on September 1. How is Eric taxed on the distribution?

• A) $500 dividend income.
• B) $1,000 dividend income.
• C) $1,500 dividend income.
• D) $3,000 dividend income.

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Definitions:

Personality

The amalgamation of attributes or traits that create a person's unique personality.

Adler's Personality Theory

A psychological theory proposed by Alfred Adler, focusing on the importance of feelings of inferiority and the striving for superiority in shaping personality.

Driving Forces

Factors that motivate or influence individuals or groups to take action or change.

Personality

The combination of characteristics or qualities that form an individual's distinctive character.