3. Distribution of a computer to a shareholder when its basis to the S Corporation was $15,000 and its fair market value was $10,000. The accumulated adjustments account balance is $10,000, and the shareholders basis in his or her stock is $10,000. There are no Subchapter C earnings and profits.

What are the Capital Gain or Taxable dividends

4. 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

5. 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