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Jared is the sole shareholder of an S corporation. At the beginning of the year, Jared had a shareholder basis of $70,000, AAA of $25,000,

Jared is the sole shareholder of an S corporation. At the beginning of the year, Jared had a shareholder basis of $70,000, AAA of $25,000, and E&P of $15,000. The corporation expects to be profitable this year. An election has not been made to treat distributions as coming first from Subchapter C E&P. If Jared takes a $40,000 cash distribution in the current year, what is his remaining basis?

$30,000

$45,000

$55,000

$70,000

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