Lemon Corporation incurs the following transactions.

Net income from operations$110,000Interest income from saving account5,000Long-term capital gain from sale of securities9,000Short-term capital loss from sale of securities4,000

Lemon maintains a valid S election and does not distribute any dividends to its shareholder, Nina. As a result, which of the following must Nina recognize? Ignore the 20% QBI deduction.

a. Capital gain of $120,000.

b. Ordinary income of $120,000.

c. Ordinary income of $115,000 and long-term capital gain of $5,000.

d. Ordinary income of $115,000, long-term capital gain of $9,000, and $4,000 short-term capital loss.