Previous years$$ cash distributions to a shareholder have reduced his or her stock basis to zero in an S corporation. How will any further cash distributions be treated for tax purposes if the company continues to have losses?

A$.$

It will be treated as a deemed sale of the shareholder$$s stock.

B$.$

It will be treated as a capital contribution to the corporation.

C$.$

It will receive passive activity loss treatment, subject to any limitations$.$

D$.$

It will be carried over indefinitely to be offset with future earnings.