Dixie Corporation distributes $31,000 to its sole shareholder, Sally. At the time of the distribution, Dixie's E&P is $25,000 and Sally's basis in her Dixie stock is $10,000. Sally's basis in her Dixie stock after the distribution is
A. $4,000.
B. $10,000.
C. $31,000.
D. $25,000.
Answer: A
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