Moc Corporation reports on the calendar yearand has made the S Corporation election. Itdistributed $200,000 in cash to its onlyshareholder, Marmi on December 31, 2020.Marmi has a basis in her stock of $225,000Oand Moc Corporation has a AAA balance of$125,000 and a AEP balance of $50,000before the distribution. Knowing this, explainhow the distribution will be taxed (if at all) toMarmi.

S corporation: A type of Business Corporation having a maximum of 100 shareholders which is taxed as…

Moc Corporation reports on the calendar year and has made the S Corporation election. It distributed $200,000 in cash to its only shareholder, Marmi on December 31, 2020. Marmi has a basis in her stock of $225,000 and Moc Corporation has a AAA balance of $125,000 and a AEP balance of $50,000 before the distribution. Knowing this, explain how the distribution will be taxed (if at all) to Marmi.

Moc Corporation reports on the calendar year and has made the S Corporation election. It distributed $200,000 in cash to its only shareholder, Marmi on December 31, 2020. Marmi has a basis in her stock of $225,000 and Moc Corporation has a AAA balance of $125,000 and a AEP balance of $50,000 before the distribution. Knowing this, explain how the distribution will be taxed (if at all) to Marmi.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 21CE

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