2. Alice Bee, age 63, is a participant in the stock bonus plan of her employer, a closely held company. She received contributions in shares to the stock bonus plan and her employer took income tax deductions as follows:

Year # of Shares Value per share at time of contribution

2014 100 $25

2015 200 $30

2016 200 $32

She terminates employment and takes a distribution from the plan of 500 employer shares having a fair market value of $20,000. What are the tax consequences to Alice Bee?

a) There are no immediate tax consequences because she has not sold the stock.

b) She has ordinary income of $14,900 at distribution.

c) She has net unrealized appreciation of $14,900.

d) She has ordinary income of $20,000 at distribution.