During the Year, Miles Nutt, the Sole Shareholder of a Calendar

question 19

Multiple Choice

During the year, Miles Nutt, the sole shareholder of a calendar year S corporation, received a distribution of $16,000. At the end of last year, 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 is $2,000.
• C) Nutt's ordinary income is $15,000.
• D) Nutt's tax-free return of capital is $11,000.

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Definitions:

Educational Choices

Decisions related to the pursuit of learning, including the selection of courses, programs, institutions, and modes of study.

Holland's Personality Types

A theory that categorizes people into six personality types—Realistic, Investigative, Artistic, Social, Enterprising, and Conventional—to help explain career choices.

Graphic Display

A visual representation of data or information, often used in assessments to illustrate results or findings.

Roles Vary

Indicates the differences in responsibilities, functions, or positions among individuals in a group or setting.