Assume that at the end of 2018, Clampett, Inc. (an S corporation) distributes long-term capital gain property

Assume that at the end of 2018, Clampett, Inc. (an S corporation) distributes long-term capital gain property

(fair market value of $40,000, basis of $25,000) to each of its four equal shareholders (aggregate distribution of $160,000). At the time of the distribution, Clampett, Inc. has no corporate E&P and J. D. has a basis of $15,000 in his Clampett, Inc. stock. How much income does J. D. recognize as a result of the distribution?

Multiple Choice

• $0.
• $15,000.
• $25,000.
• $40,000.
• None of the choices are correct.