Question Content Area

Oxen Corporation incurs the following transactions.

Net income from operations$100,000Interest income from savings account3,000Long-term capital gain from sale of securities10,000Short-term capital loss from sale of securities4,000

Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize (ignore 20% QBI deduction):

a. Ordinary income of $109,000.

b. Ordinary income of $103,000.

c. Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss.

d. Ordinary income of $103,000 and long-term capital gain of $6,000.