[The following information applies to the questions displayed below.] Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on lune 15, 2018; the second distribution was a cash distribution, and was paid on September 30, 2018. Amount Taxable Taxable as June 15 September 30 Capital gain Dividend N/A Ordinary income Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) b. Both distributions are in cash, and the first was paid on June 15, 2018, and the second on September 30, 2018. Answer is complete but not entirely correct. Amount Taxable as Taxable June 15 S N/A September 30 $ 5,000 Ordinary income
[The following information applies to the questions displayed below.] Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on lune 15, 2018; the second distribution was a cash distribution, and was paid on September 30, 2018. Amount Taxable Taxable as June 15 September 30 Capital gain Dividend N/A Ordinary income Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) b. Both distributions are in cash, and the first was paid on June 15, 2018, and the second on September 30, 2018. Answer is complete but not entirely correct. Amount Taxable as Taxable June 15 S N/A September 30 $ 5,000 Ordinary income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Am. 112.
![[The following information applies to the questions displayed below.]
Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017
(effective immediately), in preparation for taking it public. At the time of the election, the corporation had an
accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation
years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0
taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000.
How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable.
Enter N/A if not applicable.)
The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on
lune 15, 2018; the second distribution was a cash distribution, and was paid on September 30, 2018.
Amount
Taxable
Taxable as
June 15
September 30
Capital gain
Dividend
N/A
Ordinary income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8032ef1-2184-4ef6-a587-8e0696a2b4fe%2F95a3ed0e-b75e-408f-8eeb-5d0cc909719c%2Fmb1dbco_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017
(effective immediately), in preparation for taking it public. At the time of the election, the corporation had an
accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation
years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0
taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000.
How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable.
Enter N/A if not applicable.)
The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on
lune 15, 2018; the second distribution was a cash distribution, and was paid on September 30, 2018.
Amount
Taxable
Taxable as
June 15
September 30
Capital gain
Dividend
N/A
Ordinary income
Transcribed Image Text:Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17,
2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an
accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C
corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation
reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and
$60,000.
How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if
applicable. Enter N/A if not applicable.)
b. Both distributions are in cash, and the first was paid on June 15, 2018, and the second on September 30, 2018.
Answer is complete but not entirely correct.
Amount
Taxable as
Taxable
June 15
S
N/A
September 30
$
5,000
Ordinary
income
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