Melba Receives a Distribution of $210,000 from an S Corporation

question 120

Multiple Choice

Melba receives a distribution of $210,000 from an S corporation in which she is a 25% shareholder.At the same time,the corporation distributes $630,000 to the other shareholders.The corporation has AAA of $140,000 and AE&P of $20,000.Melba's basis for her stock is $50,000.Which of the following is the correct amount of Melba's capital gain resulting from the distribution?

• A)$0.
• B)$120,000.
• C)$155,000.
• D)$210,000.
• E)None of the above.

---

Definitions:

Cortical Seizure

A seizure originating in the cerebral cortex of the brain, potentially affecting motor skills, consciousness, or sensory perception.

Placebo Effect

The beneficial effect on a patient's health that arises from the patient's expectations rather than from the actual treatment.

Regression Toward The Mean

The statistical phenomenon where extreme scores or outcomes naturally return to the average over time.

Therapy

Therapy is a treatment intended to relieve or heal a disorder, usually referring to psychological counseling and support.