Greiner, Inc., a calendar year S corporation, holds no AEP. During the year, Chad, an individual shareholder,

Question:

Greiner, Inc., a calendar year S corporation, holds no AEP. During the year, Chad, an individual shareholder, receives a $30,000 cash distribution from Greiner. Prior to the distribution, Chad’s basis in his Greiner stock is $25,000.

a. Determine Chad’s ordinary income and capital gain, if any, from the distribution.

b. What is the basis of Chad’s Greiner stock after accounting for the distribution?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...