1.0W Corporation was owned by shareholder C prior to a sale of all of his stock (basis at the beginning of the year, $5,000) to D in June for $10,000. During the year, W Corporation

distributed $60,000 on May 1 and $40,000 on September 1. Indicate how the distributions

would be treated by individual shareholders C and D in the following situations (15):

Accumulated E&PCurrent E&P

a.$10,000$50,000

b.(70,000)$50,000

c.$95,000(18,250)