Hal organized Stable Corporation five years ago and has continued to own all its stock. The corporation

Question:

Hal organized Stable five years ago and has continued to own all its stock. The made an S election one year after its incorporation. At the beginning of the current year, Stable reports the following earnings accumulations:
Accumulated adjustments account (AAA) ………………$85,000
Accumulated E&P ………………………………………. 22,000
Hal’s basis in his Stable stock on January 1 of the current year is $120,000. During the current year, Stable reports the following results from its operations:
Ordinary income ……………………………..$30,000
Tax-exempt interest income ………………… 15,000
Long-term capital loss………………………. 20,000
Stable makes a $65,000 cash to Hal on August 8.
a. What income, gain, or loss (if any) do Stable and Hal recognize as a result of the What is Hal’s basis in the Stable stock on December 31?
c. What are Stable’s AAA, E&P, and OAA balances on December 31?
d. How would your answers to Parts a-c change if Stable instead distributed $120,000? Corporation
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