9. (TCOs 1 and 10) On January 1, 2010, Kinney, Inc. an electing S corporation, has $4,000 of AEP and a...

9.

(TCOs 1 and 10) On January 1, 2010, Kinney, Inc. an electing S corporation, has $4,000 of AEP and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Maine, each of whom owns 500 shares of Kinney's stock. Kinney's 2010 taxable income is $5,000. Kinney distributes $6,000 to each shareholder on February 1, 2010, and distributes another $3,000 to each shareholder on September 1. How is Erin taxed on this distribution? (Points : 5)