1. When considering C corporations, the IRS checks to see whether salaries paid are too large. In S corporations, however, it usually must verify that salaries are large enough. Account for this difference.
2. How are the tax consequences of a cash distribution different from those of a non-cash property distribution to both the corporation and the shareholders?
3. What does the accumulated adjustments account represent? How is it adjusted year by year? Can it have a negative balance?
4. If an S corporation with accumulated E&P makes a distribution, from what accounts (and in what order) is the distribution deemed to be paid from?