Jayhawk Company reports current E&P of $452,500 and a deficit in accumulated E&P at the beginning of the year of ($412,500). Jayhawk distributed $597,500 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s tax basis in her Jayhawk stock before the distribution is $98,500. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. How much of the $597,500 distribution is treated as a dividend to Christine? b. What is Christine’s tax basis in her Jayhawk stock after the distribution?
Jayhawk Company reports current E&P of $452,500 and a deficit in accumulated E&P at the beginning of the year of ($412,500). Jayhawk distributed $597,500 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s tax basis in her Jayhawk stock before the distribution is $98,500. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. How much of the $597,500 distribution is treated as a dividend to Christine? b. What is Christine’s tax basis in her Jayhawk stock after the distribution?
Chapter12: S Corporations
Section: Chapter Questions
Problem 32P
Related questions
Question
Jayhawk Company reports current E&P of $452,500 and a deficit in accumulated E&P at the beginning of the year of ($412,500). Jayhawk distributed $597,500 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s tax basis in her Jayhawk stock before the distribution is $98,500. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.)
a. How much of the $597,500 distribution is treated as a dividend to Christine?
b. What is Christine’s tax basis in her Jayhawk stock after the distribution?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
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
![PAYROLL ACCT., 2019 ED.(LL)-TEXT](https://www.bartleby.com/isbn_cover_images/9781337619783/9781337619783_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning