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?
$\begin{array}{lc}
\text { Rayburn } & \text { Newcastle } \
\text { a. } \$-0- & \$-0- \
\text { b. } \$ 7,000 & \$-0- \
\text { c. } \$-0- & \$ 7,000 \
\text { d. } \$ 7,000 & \$ 7,000
\end{array}$

Question

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The Answer of 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?
$\begin{array}{lc}
\text { Rayburn } & \text { Newcastle } \
\text { a. } \$-0- & \$-0- \
\text { b. } \$ 7,000 & \$-0- \
\text { c. } \$-0- & \$ 7,000 \
\text { d. } \$ 7,000 & \$ 7,000
\end{array}$

Rayburn Owns All the Shares of Newcastle Corporation That Operates