w At the end of the year, before distributions, Bombay (an S corporation) has an accumulated adjustments account balance of $17,800 and accumulated Earnings and profit of $23,500 from a previous year as a C corporation. During the year, Nicolette (a 40 percent shareholder) received a $23,500 distribution (the remaining shareholders received $35,250 in distributions). (Assume her stock basis is $47,000 after considering her share of Bombay's income for the year but before considering the effects of the distribution.) Required: a. What are the amount and character of income or gain Nicolette must recognize from the distribution? ' b. What is her basis in her Bombay stock at the end of the year? s o B [