Micaela Owns All the Shares of the Madison Corporation That $\quad$

Short Answer

Micaela owns all the shares of the Madison Corporation that operates as an S corporation.Micaela's basis in the stock is $40,000.During the year she receives a cash distribution of $10,000 from Madison.What must Micaela and Madison report as income from the cash distribution?
$\quad$ Micaela $\quad$ Madison
a. $\$ - 0 - \quad \$ - 0 -$
b. $\$ 10,000 \quad \$ - 0 -$
c. $\$ - 0 - \quad \$ 10,000$
d. $\$ 10,000 \quad \$ 10,000$