This Year, Jiang, the Sole Shareholder of a Calendar Year

question 16

Multiple Choice

This year, Jiang, the sole shareholder of a calendar year S corporation, received a distribution of $17,000. On December 31 of the prior year, his stock basis was $3,000. The corporation earned $12,000 ordinary income during the year. It has no accumulated E&P. Which statement is correct? Ignore the 20% QBI deduction.

• A) Jiang recognizes a $2,000 LTCG.
• B) Jiang's stock basis will be $2,000.
• C) Jiang's ordinary income is $15,000.
• D) Jiang's return of capital is $11,000.

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