Cactus Corporation,an S Corporation,had Accumulated Earnings and Profits of $100,000

question 32

Multiple Choice

Cactus Corporation,an S Corporation,had accumulated earnings and profits of $100,000 at the beginning of 2011.Tex and Shirley each own 50% of the stock.Cactus does not make any distributions during 2011,but had $200,000 of ordinary income.In 2012,ordinary income was $100,000 and distributions were $100,000.What is Tex's ordinary income for 2012?

• A)$0
• B)$50,000
• C)$100,000
• D)$200,000

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Definitions:

Bailment

A legal relationship in common law where physical possession of personal property is transferred from one person (the bailor) to another (the bailee) who temporarily holds it under an agreement.

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The direct, physical control or holding of an object or property by an individual or entity.

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A legal document issued by a carrier to a shipper, detailing the type, quantity, and destination of the goods being transported.