During 2010,Shirley Nutt,the Sole Shareholder of a Calendar Year S

question 46

Multiple Choice

During 2010,Shirley Nutt,the sole shareholder of a calendar year S corporation,received a distribution of $16,000.On December 31,2009,her 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.

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Definitions:

Mucus Thickens

A condition where the mucus becomes more viscous, often leading to congestion and difficulty in breathing or clearing passages.

Meconium Ileus

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Cystic Fibrosis

A genetic disorder that affects the lungs, pancreas, and other organs, leading to thick sticky mucus production, which causes respiratory and digestive problems.

Foul-Smelling Stools

A symptom often associated with gastrointestinal problems, where the stool exudes an unusually strong, bad odor, indicating possible infections or malabsorption issues.