On January 3, 20X1, Bennett and Malik each owned 100 shares of the 200 issued shares of Fedderman stock. Bennett's basis in Fedderman shares on that date was $11,400. Bennett sold all of his Fedderman shares to Gibbs on January 31, 20X1, and Fedderman made a valid election to terminate its tax year. Bennett's share of ordinary income from Fedderman prior to the sale was $2,200. Fedderman made a cash distribution of $2,800 to Bennett on January 30, 20X1.