LO.4, 5 McLin, Inc., a calendar year S corporation, holds $90,000 of AEP. Tobias, the sole McLin shareholder, has an $80,000 basis in his stock with a zero balance in the AAA.

a. Determine the tax aspects if a $90,000 salary is paid to Tobias. Ignore the QBI deduction.

b. Same as part (a), except that Tobias receives a cash distribution of $90,000 from AEP