Exercise 12-16 (Algorithmic) (LO. 7)

Holbrook, a calendar year S corporation, distributes $30,700 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $36,840, Holbrook's AAA balance is $13,815, and Holbrook has $4,605 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $30,700 is from AAA and AEP as well as how Cody's stock basis is affected.

If an amount is zero, enter "0".

	Basis in Stock	Distribution from Account	Effect on Stock Basis
Beginning stock basis	$36,840
From AAA account	$	$	$
From AEP account	$	$	$
From Cody's stock basis	$	$	$
Ending stock basis	$