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At the beginning of 2015, Tate Corp. has E & P of $30,000. During 2015 the corporation generates $10,000 of additional E & P. On the last day of the tax year, the corporate distributes $35,000 to its sole shareholder, Tom, whose stock basis is $15,000 before the distribution. Which of the following statements is true?a)John recognizes $30,000 of dividend income.b)John's stock basis is now $0.c)Tate Corp.'s E & P balance is now $5,000.d)John recognizes a taxable gain of $20,000.
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