The Jane Corporation, an S corporation, makes several property distributions to its two equal shareholders, A and B, during the year. The distributions are as follows:

At the beginning of the year, the corporation's accumulated adjustments account is $35,000; A's basis in his shares is $24,000; and B's basis is $32,000. The corporation reports net income of $6,000 for the year, excluding any effect of the distributions. Determine the basis in A and B's shares and the balance in the corporation's AAA at the end of the year.

Transcribed Image Text:

Cash Land (Basis $5,000) Equipment (Basis $15,000) $5,000 $10,000(FMV) $5,000 $10,000(FMv)