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Tiger Corp is a calendar year taxpayer that elected S status in its first year of operations. Tiger is owned by Harbert (600 shares with
- Tiger Corp is a calendar year taxpayer that elected S status in its first year of operations. Tiger is owned by Harbert (600 shares with beginning AB = $12,000) and Leath (400 shares with beginning AB = $8000). The income statement for Tiger Corp is presented below. The corporations beginning AAA balance was -$30,000, OAA was $1,000, and Accumulated E&P from prior years as a C corp was $1,000.
Sales Revenue | $105,000 | |
Municipal bond income | $5,000 | |
Cost of goods sold | ($45,000) | |
Salary expense to owners | ($20,000) | |
Employee wages | ($5,000) | |
Net STCG stock sale | $2,000 | |
Depreciation expense | ($10,000) | |
Charitable contributions | ($1,000) | |
Fines and Penalties | ($2,000) | |
Net Income | $29,000 |
Tax depreciation is $15,000 of which $5,000 is Sec. 179 depreciation. Tiger Corp also made a $10,000 distribution.
- Provide a book-tax reconciliation above and distinguish between ordinary business income (loss) and separately stated items (taxable and nontaxable).
- Determine the ending balances in all entity level accounts after the distribution
- Determine Harberts ending adjusted basis.
- What is the tax treatment of the distribution to Harbert?
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