Holbrook, a calendar vear S corporation, distributes $177,700 cash to its only shareholder, Cody, on December...

Transcribed Image Text:

Holbrook, a calendar vear S corporation, distributes $177,700 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $213,240, Holbrook's AAA balance is $79,965, and Holbrook has $26,655 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $177,700 is from AAA and AEP as well as how Cody's stock basis is affected. If an amount is zero, enter "0". Distribution from Effect on Basis in Stock Account Stock Basis Beginning stock basıs $213,240 From AAA account 79,965 -79,965V From AEP account 26,655V From Cody's stock basis 71,080V 71,080 V Ending stock basis Holbrook, a calendar vear S corporation, distributes $177,700 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $213,240, Holbrook's AAA balance is $79,965, and Holbrook has $26,655 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $177,700 is from AAA and AEP as well as how Cody's stock basis is affected. If an amount is zero, enter "0". Distribution from Effect on Basis in Stock Account Stock Basis Beginning stock basıs $213,240 From AAA account 79,965 -79,965V From AEP account 26,655V From Cody's stock basis 71,080V 71,080 V Ending stock basis

Answer rating: 100% (QA)

Amount Distribution from Effect on Basis in stock Account Stock basis Beginning stock basis 2... View the full answer