During the year, Gary, the sole shareholder of a calendar year S corporation, received a distribution of $16,000. At the end of last year, his stock basis was $4,000. The corporation earned $11,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?

a. Gary recognizes a $1,000 LTCG.

b. Garys stock basis is $2,000.

c. Garys ordinary income is $15,000.

d. Garys tax-free return of capital is $11,000.

Please explain.