Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2019 (effective immediately), in preparation for taking it public.

Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2019 (effective immediately), in preparation for taking it public. Miley had previously elected S corporation status on January 1, 2018. At the time of the election, the corporation had an accumulated adjustments account balance of $165,000 and $462,500 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $146,250. During 2020, Mileys corporation reported $0 taxable income or loss. Also, during 2020 the corporation made distributions to Miley of $87,500 and $65,000. How are these distributions taxed to Miley assuming the following?

a. Both distributions are in cash. The first was paid on June 15, 2020, and the second was paid on November 15, 2020.

Amount Taxable

June 15 November 15

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Strategies For Financial Services Compliance

Authors: Annie Mills, Peter Haines

2nd Edition

1118906136, 978-1118906132

More Books

Students also viewed these Accounting questions

Question

Explain briefly how a cap-and-trade system is supposed to work.

Answered: 1 week ago

Question

Distinguish between asteroids and meteoroids.

Answered: 1 week ago