Rayburn Owns All the Shares of Newcastle Corporation That Operates $\quad$

Short Answer

Rayburn owns all the shares of Newcastle Corporation that operates as an S corporation.Rayburn's basis in the stock is $15,000.During the year he receives a cash distribution of $22,000 from Newcastle.What must Rayburn and Newcastle report as income from the cash distribution?
$\quad$ Rayburn $\quad$ Newcastle
a. $\$ - 0 - \quad \$ - 0 -$
b. $\$ 7,000 \quad \$ - 0$ -
c. $\$ - 0 - \quad \$ 7,000$
d. $\$ 7,000 \quad \$ 7,000$