Dart Corp., a calendar-year corporation, was formed in 2004 and made an S corporation election in 2006 that is still in effect. Its books and records for 2014 reflect the following information:
Accumulated earnings and profits at 1/1/14: $90,000
Accumulated adjustment account at 1/1/14: $50,000
Ordinary income for 2014: $200,000
Dart Corp. is solely owned by Robert, whose basis in Dart's stock was $100,000 on January 1, 2014. during 2014, Dart distributed $310,000 to Robert. What is the amount of the $310,000 distribution that Robert must report as dividend income for 2014 assuming no special elections were made with regard to the distribution?
a. $0
b. $60,000
c. $90,000
d. $140,000
Answer: B
Tax
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