Final answer:
The correct option is c. $17,000.
When reporting a qualified lump sum distribution as ordinary income in Oregon, the entire distribution amount is typically considered for state tax additions. In Bill's case, with a distribution consisting of $11,000 of ordinary income and $6,000 of capital gains, the Oregon addition would likely be the total amount of $17,000.
Step-by-step explanation:
The student has asked which amount from Bill's qualified lump sum distribution would be considered an Oregon addition in his tax filing.
Since the qualified lump sum distribution that Bill received consisted of $11,000 of ordinary income and $6,000 of capital gains, and he chose to report all of it as ordinary income and average it using Form 4972, the entire distribution of $17,000 will be used to determine his Oregon addition. In the context of Oregon state taxes, any addition or subtraction relates to how income is treated differently at the state level compared to federal taxation. Assuming Oregon requires the capital gains portion of retirement distributions to be added back, the answer should reflect the specific amount required to be added based on state guidelines.
However, without specific Oregon tax law context for the year in question, the safest assumption is to consider the entire distributed amount as the Oregon addition, which would make the correct answer (c) $17,000, unless Oregon law specifies otherwise.