Answered: During the year, Miles Nutt, the sole… | bartleby

SWFT Essntl Tax Individ/Bus Entities 2020

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter15: S Corporations

Section: Chapter Questions

Problem 21P

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Question

During the year, Miles Nutt, the sole shareholder of a calendar year S corporation, received a
distribution of $16,000. At the end of last year, his 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 is $2,000.
c. Nutt's ordinary income is $15,000.
d. Nutt's tax-free return of capital is $11,000.'

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