Question
Rocky Corporation, an S corporation, reports the following results for the current year Ordinary income: $60,000 Long-term capital gain: $20,000 Municipal bond interest income: $10,000
Rocky Corporation, an S corporation, reports the following results for the current year
Ordinary income: $60,000
Long-term capital gain: $20,000
Municipal bond interest income: $10,000
Rocky's AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000, respectively. Rocky makes a $200,000 cash distribution to its sole shareholder during the year. The shareholder's basis for Rocky stock on January 1 was $120,000. How much of the distribution will be taxable?
A. $0
B. $40,000
C. $50,000
D. $80,000
Step by Step Solution
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International Corporate Reporting Global And Diverse
Authors: Pauline Weetman, Ioannis Tsalavoutas, Paul Gordon
5th Edition
1138364991, 9781138364998
