Question

Mary is a shareholder in Sheets, Inc., a calendar year S corporation. At the beginning of the year, her stock basis is $10,000, her share of the AAA is $2,000, and her share of corporate AEP is $6,000. At the end of the year, Mary receives a $6,000 cash distribution from Sheets.
Mary's share of S corporation items includes a $2,000 long-term capital gain and a $10,000 ordinary loss. Determine the effects of these events on Mary's share of Sheets's AAA, on Sheets's AEP, and on Mary's stock basis.


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  • CreatedMay 25, 2015
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