Dixie Corporation Distributes $31,000 to Its Sole Shareholder, Sally

Multiple Choice

Dixie Corporation distributes $31,000 to its sole shareholder, Sally. At the time of the distribution, Dixie's E&P is $25,000 and Sally's basis in her Dixie stock is $10,000. Sally's basis in her Dixie stock after the distribution is

A) $4,000.
B) $10,000.
C) $25,000.
D) $31,000.