During 2016, Jayden Steele received a distribution of $24,000 on stock he owns in Razorbill Corporation He had planned to report this amount as dividend income until he talked to his father in law, Jim According to Jim, who had examined Razorbill 's financial statements, the company suffered an ope...

Hoffman Young Raabe Maloney Nellen CPAs 5191 Natorp Boulevard Mason OH 45040 March 6 2017 Jayden Ste ...

During 2016, Jayden Steele received a distribution of $24,000 on stock he owns in Razorbill Corporation. He

Question:

During 2016, Jayden Steele received a of $24,000 on stock he owns in Razorbill Corporation. He had planned to report this amount as income until he talked to his father-in-law, Jim. According to Jim, who had examined Razorbill's financial statements, the company suffered an operating loss for the year. Consequently, Jim thinks that the is a nontaxable return of capital. Because Jim is an accountant, Jayden is confused and seeks a second opinion from you. Write a letter to Jayden (1260 Pike Street, Eagle, ID 83616), explaining the possibilities involved.
Partial list of research aids:
Jason Michael Juha, 103 TCM 1338, T.C.Memo. 2012-68.
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...