In a C corp., how is a distribution taxed to the corporation and the shareholder? Assume a C corp. has $5,000 in current E&P and $10,000 in accumulated E&P. The C corp. makes a distribution of land (FMV of $20,000, basis of $16,000) and $7,000 cash to its sole shareholder. The shareholders basis in the C corp. stock is $8,000. What is the tax treatment of the distributions to the corporation and to the shareholder?

In an S corp., how is a distribution taxed to the shareholder if the S corp? has accumulated E & P and AAA. For example, assume an S corp. has accumulated E & P of $1,000, AAA of $5,000, and makes a $7,000 cash distribution to the shareholder. Also, assume the shareholder's basis in the S corp. stock is $5,500. How is this distribution taxed to the shareholder?

In a partnership, for example, assume the ABC partnership distributes $5,000 cash, $1,000 in unrealized receivables (zero inside basis), $3,000 in inventory ($1,000 inside basis), and a piece of machinery (FMV of $3,000 and $500 inside basis) to a partner who has an outside basis of $10,000. How are these distributions taxed to the receiving partner?