Clampett,Inc.has been an S corporation since its inception.On July 15,2019,Clampett,Inc.distributed $50,000 to J.D.His basis in his Clampett,Inc.stock on January 1,2019,was $30,000.For 2019,J.D.was allocated $10,000 of ordinary income from Clampett,Inc.and no separately stated items.What is the amount of income J.D.recognizes related to Clampett,Inc.in 2019?

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The distribution exceeds J.D.'s basis in his stock by $20,000 ($50,000 - $30,000). This amount is recognized as a capital gain. J.D. also recognizes the $10,000 of ordinary income allocated to him. Thus, the total amount of income J.D. recognizes related to Clampett, Inc. in 2019 is $20,000.