McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 70

Janna has a tax basis of $15,000 in her Mimikaki stock (Mimikaki has been an S corporation since inception).In 2011, Janna was allocated $20,000 of ordinary income from Mimikaki.What is the amount and character of gain she recognizes from end of the year distributions in each of the following alternative scenarios, and what is her stock basis following each distribution?
a.Mimikaki distributes $10,000 to Janna.b.Mimikaki distributes $20,000 to Janna.c.Mimikaki distributes $30,000 to Janna.d.Mimikaki distributes $40,000 to Janna.