Nancy receives a distribution of $170,000 form ABC corporation, an S corporation, in which she is the sole(100%) shareholder. ABC has an accumulated adjustment account of $22,500 and accumulated earning and profits of $2500. Nancy basis her stock ABC corp is $30,000. The amount capital gain recognized by Nancy as result of this distribution is $137,500 true or false

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 6BCRQ
icon
Related questions
Question
100%

Nancy receives a distribution of $170,000 form ABC corporation, an S corporation, in which she is the sole(100%) shareholder. ABC has an accumulated adjustment account of $22,500 and accumulated earning and profits of $2500. Nancy basis her stock ABC corp is $30,000. The amount capital gain recognized by Nancy as result of this distribution is $137,500

true or false 

 

Please give proper explanation to understand 

Will definitely like 

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
S Corporations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L