Problem 12-26 (Algorithmic) (LO. 6, 7) On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $24,000. Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ X dividend income for the July 1 distribution and $ X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free X distribution from AAA.
Problem 12-26 (Algorithmic) (LO. 6, 7) On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $24,000. Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ X dividend income for the July 1 distribution and $ X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free X distribution from AAA.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter15: S Corporations
Section: Chapter Questions
Problem 25P
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Transcribed Image Text:Problem 12-26 (Algorithmic) (LO. 6, 7)
On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two
shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year
is $24,000.
Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are
the shareholders taxed on the distributions? Ignore the 20% QBI deduction.
Do not round intermediate computations. If required, round your final answers to the nearest dollar.
Erin and Frank each report $
X dividend income for the July 1 distribution and $
X each for the
December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a
tax-free
X distribution from AAA.
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