Assume That at the End of 2017, Clampett, Inc

Assume that at the end of 2017, Clampett, Inc. (an S corporation) distributes long-term capital gain property (fair market value of $40,000, basis of $25,000) to each of its four equal shareholders (aggregate distribution of $160,000) . At the time of the distribution, Clampett, Inc. has no corporate E&P and J. D. has a basis of $15,000 in his Clampett, Inc. stock. How much income does J. D. recognize as a result of the distribution?

A) $15,000.
B) $0.
C) $40,000.
D) $25,000.
E) None of the choices are correct.