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Mercury Stage withdraws $20,000 from the S corporation of which she is a 100-percent owner. Her adjusted basis in her S corporation interest is $150,000.
Mercury Stage withdraws $20,000 from the S corporation of which she is a 100-percent owner. Her adjusted basis in her S corporation interest is $150,000. What is the tax consequence of this transaction to Mercury Stage?
Mercury has $20,000 of taxable dividend income.
Mercury has no taxable income.
Mercury has $20,000 of compensation income.
None of the above.
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