Collette’s S corporation holds a small amount of accumulated earnings and profits (AEP), requiring the use of a more complex set of distribution rules. Collette’s accountant tells her that this AEP forces the maintenance of the AAA figure each year. Discuss the issues that arise with respect to distributions when an S corporation holds AEP.
Answer to relevant QuestionsScott Tyrney owns 21% of an S corporation. He is confused with respect to the amounts of the corporate AAA and his stock basis. Write a brief memo to Scott identifying the key differences between AAA and an S shareholder’s ...TyroneCo, an S corporation with a positive E & P balance, reports gross receipts for the year totaling $400,000 (of which $200,000 is PII). Expenditures directly connected to the production of the PII total $80,000. Compute ...Kaiwan, Inc., a calendar year S corporation, is partly owned by Sharrod, whose beginning stock basis is $32,000. During the year, Sharrod’s share of a Kaiwan long-term capital gain (LTCG) is $5,000, and his share of an ...Maple, Inc., is an S corporation with a single shareholder, Bob Maple. Bob believes that his stock basis in the entity is $50,000, but he has lost some of the records to substantiate this amount. Maple reports an ordinary ...The tax treatment of fringe benefits for more-than-2% shareholder-employees of S corporations is less favorable than that for nonowners or employees of some other entities. What fringe benefits are subject to this ...
Post your question