Donelly Corp., a calendar year S corporation, has no accumulated earnings and profits. During 2022, Harrison, an individual shareholder, receives a cash distribution of $12,000 from Donelly. Harrison's basis in his stock is $10,000 (before adjustment for the distribution but after adjustment for S corp. income). How much of this distribution should Harrison report in his 2022 personal tax return as capital gain?

		a. $10,000.
		b. $12,000.
		c. $2,000.
		d. zero.

How much of this distribution should Harrison report in his 2022 personal tax return as ordinary income?

		a. $10,000.
		b. $12,000.
		c. $2,000.
		d. zero.

What is Harrison's basis in his Donelly stock after he receives the distribution?

		a. $10,000.
		b. ($2,000).
		c. $12,000.
		d. Zero.