Holbrook, a calendar year S corporation, distributes $15,000 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $20,000, Holbrook's AAA balance is $8,000, and Holbrook has $2,500 AEP before the distribution. According to the distribution ordering rules, complete the chart below. If an amount is zero, enter "0". Distribution from Account From AAA Account From AEP Account From Cody's stock basis Affect on Stock Basis Balance after Distribution $-8000 $8000 $2500 $0 $ $ $0 $0 $
Holbrook, a calendar year S corporation, distributes $15,000 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $20,000, Holbrook's AAA balance is $8,000, and Holbrook has $2,500 AEP before the distribution. According to the distribution ordering rules, complete the chart below. If an amount is zero, enter "0". Distribution from Account From AAA Account From AEP Account From Cody's stock basis Affect on Stock Basis Balance after Distribution $-8000 $8000 $2500 $0 $ $ $0 $0 $
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 37P
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N7.
Account
![Holbrook, a calendar year S corporation, distributes $15,000 cash to its only shareholder, Cody, on December 31. Cody's
basis in his stock is $20,000, Holbrook's AAA balance is $8,000, and Holbrook has $2,500 AEP before the distribution.
According to the distribution ordering rules, complete the chart below.
If an amount is zero, enter "0".
Distribution from Account
From AAA Account
From AEP Account
From Cody's stock basis
Affect
on
Stock
Basis
Balance
after
Distribution
$-8000 $8000
$2500 $0
$
$
$0
$0
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcd96efc3-2f98-4cac-898c-7da2d5d05bd8%2F6331f7b4-376e-467e-9353-ac3af0a18cdb%2Fxrzfk1_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Holbrook, a calendar year S corporation, distributes $15,000 cash to its only shareholder, Cody, on December 31. Cody's
basis in his stock is $20,000, Holbrook's AAA balance is $8,000, and Holbrook has $2,500 AEP before the distribution.
According to the distribution ordering rules, complete the chart below.
If an amount is zero, enter "0".
Distribution from Account
From AAA Account
From AEP Account
From Cody's stock basis
Affect
on
Stock
Basis
Balance
after
Distribution
$-8000 $8000
$2500 $0
$
$
$0
$0
$
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