Question
Athena is the sole shareholder of Parthenon, Inc., an S Corporation. Parthenon has beginning AAA as of 1/1/98 of $25,000, beginning AE&P of $50,000, and
Athena is the sole shareholder of Parthenon, Inc., an S Corporation. Parthenon has beginning AAA as of 1/1/98 of $25,000, beginning AE&P of $50,000, and OAA of $5,000. Athena has a beginning adjusted basis in her stock of $25,000. During 1998, Parthenon had $50,000 in ordinary income, ($20,000) in capital losses, and distributed $55,000 to Athena on 12/31/98. In addition, Parthenon had (20,000) in positive timing differences, $15,000 in negative timing differences, and 30,000 in permanent differences. Parthenon made $75,000 in distributions to Athena during the year.
Athena is the sole shareholder of Parthenon, Inc., an S Corporation. Parthenon has beginning AAA as of 1/1/98 of $25,000, beginning AE&P of $50,000, and OAA of $5,000. Athena has a beginning adjusted basis in her stock of $25,000. During 1998, Parthenon had $50,000 in ordinary income, ($20,000) in capital losses, and distributed $55,000 to Athena on 12/31/98. In addition, Parthenon had (20,000) in positive timing differences, $15,000 in negative timing differences, and 30,000 in permanent differences. Parthenon made $75,000 in distributions to Athena during the year.
How much of the $75,000 is taxable to Athena and what is Athena’s ending adjusted basis?
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Business Law Text and Cases
Authors: Kenneth W. Clarkson, Roger Miller, Frank B. Cross
14th edition
978-1305967250, 1305967259, 978-1337514422, 133751442X, 978-1337374491
