In 2012, Teague Co., a regular C Corporation, deducted a $45,000 payment as a business expense deduction. In 2013, after Teague Co. had converted to an S corporation, the company recovered $20,000 of the deduction. Will the shareholders of Teague Co. (the owners of the S-Corporation) be required to report any taxable income? Explain & support your answer with code, regs, rulings, and court cases.