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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 $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $
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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