Sloane is the sole shareholder of a calendar-year S Corporation. His A/B basis in his stock is $10,000 and the AAA is $12,000 at the beginning of the year. The corporation reports a LTCG of $5,000 and a $9,000 non-separately-stated loss, The corporation makes a cash distribution to Sloan of $7,000 at the end of the year.

a. What is Sloane’s A/B in his stock resulting from these transactions?

b. How much of the loss can he deduct currently? How much is carried forward?

c. What is the effect on the AAA of these transactions? Is the distribution taxable?

Answer rating: 100% (QA)

a A B in Stock Beginning A B in Stock L TC G Cash Distributi... View the full answer