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Rose Corporation is an S corporation with one shareholder, Eddie. Eddie's stock basis at the beginning of the current year is $8,000. Rose Corporation reports
Rose Corporation is an S corporation with one shareholder, Eddie. Eddie's stock basis at the beginning of the current year is $8,000. Rose Corporation reports the following results for the current year:
- Ordinary loss: $6,000
- Dividend income: $2,000
In addition, at the beginning of the current year, the S corporation has a $5,000 AAA balance and a $4,000 AEP balance. Rose Corporation distributes $7,500 cash to Eddie. Provide each of the following amounts.
- Ending balance in AAA
- Ending balance in AEP
- Eddie's ending stock basis
- The amount of the distribution that is taxable
- The amount of the loss that is deductible
Now assume the same facts as above except that Rose Corporation elects the AAA bypass election.
- Ending balance in AAA
- Ending balance in AEP
- Eddie's ending stock basis
- The amount of the distribution that is taxable
- The amount of the loss that is deductible
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