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On December 31st, 2013, Kinney Inc., an electing S corporation, holds AEP of 8,000 and 9,000 AAA. Kinney has one shareholder, Eric, with a stock

On December 31st, 2013, Kinney Inc., an electing S corporation, holds AEP of 8,000 and 9,000 AAA. Kinney has one shareholder, Eric, with a stock basis of 15,000, Kinneys 2014 taxable income is 6,000. Kinney distributes 16,000 to Eric on December 31st 2014.The AAA bypass election was not elected. How is Eric taxed on the distribution?

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