Serenity Receives a Nonliquidating Distribution from the Hickock Corporation, an S

Multiple Choice

Serenity receives a nonliquidating distribution from the Hickock Corporation, an S corporation. Which of the following statements concerning nonliquidating distributions from an S corporation are correct?
I.A nonliquidating cash distribution is taxable if the amount distributed exceeds Serenity's basis in Hickock.
II.The amount of the dividend on a nonliquidating distribution of property is the fair market value of the property distributed.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.