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During the year, Marcus, the sole shareholder of a calendar year S corporation, received a distribution of $ 1 6 , 0 0 0 .

During the year, Marcus, 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 holds a zero balance in accumulated E & P. Which statement is correct?
a. Marcus's stock basis is $2,000.
b. Marcus recognizes a $1,000 LTCG.
c. Marcus's tax-free return of capital is $11,000.
d. Marcus's ordinary income is $15,000.
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