A client names James Smith holds a stock basis of $10,000 at the beginning of the tax year as the sole shareholder of Smith Enterprises, Inc. an S corporation. During the year, the S corp. reports the following: Net Taxable income-$25,000 and Net Short-term Capital losses of $18,000. James asks you if he should take a distribution of $15,000 or $40,000? Please write a letter and explain the results of each option and which one you would recommend. Please include information on the taxable income, cash distribution, short-term capital loss and stockholder's basis.