Problem 22-39 (LO. 8, 9) At the beginning of the tax year, Lizzie holds a $10,000 stock basis as the sole shareholder of Spike, Inc., an S corporation. During the year, Spike reports the following: Net taxable income from sales $25,000 Net short-term capital loss (18,000) Cash distribution to Lizzie, 12/31 40,000 If an amount is zero, enter "0". 57,000 X. a. Determine Lizzie's stock basis at the end of the year. $ b. Of Lizzie's $40,000 cash distribution, $ is tax-free and $ is capital gain a c. The entity's short-term capital loss is not deductible by Lizzie this year. Problem 22-28 (LO. 6) On January 1, 2018, Kinney, Inc., an S corporation, reports $4,000 of accumulated E & P and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $5,000 Kinney distributes $6,000 to each shareholder on July 1, and it distributes another $3,000 to each shareholder on December 21 How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction Round any division to five decimal places. If required, round final answers to the nearest dollar. Erin and Frank each report $ 10,000 X dividend income for the July 1 distribution and each for the December 21 distribution. Assuming that the shareholders 5,000 have sufficient basis in their stock, both Erin and Frank each receive a tax-free distribution from AAA 7,500