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Anna formed Frozen Corporation in 2017. The corporation operated as a C-corporation from 2017 until 2020, when it elected to be taxed as an S-Corporation.

Anna formed Frozen Corporation in 2017. The corporation operated as a C-corporation from 2017 until 2020, when it elected to be taxed as an S-Corporation. At the beginning of the current year, Anna had a basis in her stock of $37,000, basis in debt of $15,000. The corporations balance in the AAA at the beginning of the current year was $18,000 and it had Accumulated E&P (AEP) of $32,000 from prior years. Frozens records for the current year provide the following information:

Sales

$520,000

Cost of goods sold

(288,000)

Miscellaneous Operating Expense

(150,000)

Salary to Anna

(78,000)

Nondeductible entertainment expense

(6,000)

Tax-exempt Interest Income

22,000

Expenses related to tax-exempt interest income

(12,000)

Long Term Capital Gain

23,000

Short Term Capital Loss

(11,000)

Charitable Contribution

(5,000)

Cash Distribution to Anna

80,000

Compute Annas stock and debt basis in the corporation and the corporations balance in AAA and AEP as of the end of the taxable year. Assume Anna is the sole shareholder.

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