The profit and loss statement of Kitsch Ltd., an S corporation, shows $100,000 book income. Kitsch is owned equally by four shareholders. From supplemental data, you obtain the following information about items that are included in book income.

Selling expenses	($21,200)
Tax-exempt interest income	3,000
Dividends received	9,000
1231 gain	7,000
Depreciation recapture income	11,000
Net income from passive real estate rentals	5,000
Long-term capital loss	(6,000)
Salary paid to owners (each)	(12,000)
Cost of goods sold	(91,000)

a. The entity's nonseparately stated income is $82,000.

b. The portion of nonseparately stated income or loss for James Billings, one of the Kitsch shareholders, is $20,500.

c. What is James Billings share of tax-exempt interest income, if any? $

Is the income taxable to him this year? not taxable