Question
Daniel is the sole shareholder in Helio, Inc., a calendar-year corporation. After operating as a C corporation for 5 years, Helio, Inc, elected S corporation
Daniel is the sole shareholder in Helio, Inc., a calendar-year corporation. After operating as a C corporation for 5 years, Helio, Inc, elected S corporation status in 2015. At the beginning of 2021, Daniel had a stock basis in Helio of $100,000, an accumulated adjustments account (AAA) balance of $25,000, and accumulated earnings and profits of $15,000. This year, Daniel receives a $50,000 distribution. Per his k-1 from Helio, Inc., Daniel has a $4,000 long-term capital gain and $10,000 of non-separately stated income.
Determine Daniels ending balance in AAA, AEP and stock basis.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started