Question
1. Distribution of $15,000 cash to a shareholder when the accumulated adjustment account balance is $5,000 and the shareholders basis in his or her stock
1. Distribution of $15,000 cash to a shareholder when the accumulated adjustment account balance is $5,000 and the shareholders basis in his or her stock is $5,000. The shareholder has made a bona fide loan (the balance is $5,000) to the corporation. There are no Subchapter C earnings and profits.
What are the Capital Gain or Taxable dividends
2. Distribution of $15,000 cash to a shareholder when the accumulated adjustments account balance is $5,000 and the shareholders basis in his or her stock is $5,000. There is $5,000 of Subchapter C earnings and profits. No election to apply distributions to earnings and profits first has been made
What are the Capital Gain or Taxable dividends
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