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.

---

Definitions:

Efficiency

The measure of how effectively resources (such as time, money, and effort) are used to achieve a goal or perform a task.

Customer Satisfaction

A measure of how products or services provided by a company meet or exceed customer expectation.

Scanlon Plan

A type of gainsharing program that rewards employees for productivity improvements and cost savings within a company.

Labor Costs

Expenses associated with compensating employees, including wages, benefits, and taxes.