Assume that the tax law is the same for 2018, 2019 and 2020 involving this issue. Jack Freeman, a calendar year taxpayer, owns 30 percent of an S corporation which closes its books on June 30 each year. On November 30, 2018 and April 30, 2019, the S corporation pays a $40,000 cash dividend and has a taxable income for the year ending June 30, 2018 of $90,000. Jack, on his personal return would report income of:

a. $12,000 for 2018 and $12,000 for 2019

b. $12,000 for 2018 and $15,000 for 2019

c. $0 for 2018 and $27,000 for 2019

d. $12,000 for 2018 and $27,000 for 2019

e. $40,000 for 2018 and $50,000 for 2019