Maria and Christopher each own 50% of Cockatoo Corporation, a calendar year taxpayer; Maria's basis in her stock is $25,000 and Christopher's basis in his stock is $8,000. Distributions from Cockatoo are $40,000 to Maria on April 1 and $60,000 to Christopher on May 1. Cockatoo's CEP is $30,000 and its AEP is $8,000. As a result of the distributions:

Select one:

a.

Maria has $20,000 dividend income and a stock basis of $0

b.

Maria has a $23,000 dividend and a stock basis of $5,000

c.

Christopher will recognize a $34,000 capital gain and his stock basis is $2,000

d.

B. and C. are correct.

e.

None of these.