Liang, a calendar year S corporation, distributes $13,000 cash to its only shareholder, Aaron, on December 31. Aaron’s basis in his stock is $15,000. Liang’s AAA balance is $5,000; Liang holds a $7,500 AEP before this distribution. There is no OAA balance. Complete the following chart

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Liang, a calendar year S corporation, distributes $13,000 cash to its only shareholder, Aaron, on December 31. Aaron’s basis in his stock is $15,000. Liang’s AAA balance is $5,000; Liang holds a $7,500 AEP before this distribution. There is no OAA balance. Complete the following chart

Distribution from AAA Distribution from AEP
Aaron's Stock Basis
Beginning balance
Distribution ($13,000)
From AAA
From AEP
From stock basis
Ending balance
Transcribed Image Text:Distribution from AAA Distribution from AEP Aaron's Stock Basis Beginning balance Distribution ($13,000) From AAA From AEP From stock basis Ending balance
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