Mary is a shareholder in CarrollCo, a calendar year S corporation. At the beginning of the year, her stock basis is $10,000, her share of the AAA is $2,000, and her share of corporate AEP is $6,000. At the end of the year, Mary receives a $6,000 cash distribution from CarrollCo. Mary's share of S corporation items includes a $2,000 long- term capital gain and a $10,000 ordinary loss. Determine the effects of these events on Mary's share of CarrollCo's AAA, on CarrollCo's AEP, and on Mary's stock basis. If an item has no effect or an amount is zero, enter "0". Enter amounts as positive numbers. However, use the minus sign to indicate if a "balance" amount is negative. Beginning balance Distribution Balance LTCG Balance Loss Ending balance AAA $2,000 2,000 0 2,000 2,000 ✓ 10,000 ✓) Stock Basis $10,000 0 X 2,000 10,000 -10,000 0 AEP $6,000 4,000 2,000 2,000 X 0x -2,000 X ) 0 X

Mary is a shareholder in CarrollCo, a calendar year S corporation. At the beginning of the year, her stock basis is $10,000, her share of the AAA is $2,000, and her share of corporate AEP is $6,000. At the end of the year, Mary receives a $6,000 cash distribution from CarrollCo. Mary's share of S corporation items includes a $2,000 long- term capital gain and a $10,000 ordinary loss. Determine the effects of these events on Mary's share of CarrollCo's AAA, on CarrollCo's AEP, and on Mary's stock basis. If an item has no effect or an amount is zero, enter "0". Enter amounts as positive numbers. However, use the minus sign to indicate if a "balance" amount is negative. Beginning balance Distribution Balance LTCG Balance Loss Ending balance AAA $2,000 2,000 0 2,000 2,000 ✓ 10,000 ✓) Stock Basis $10,000 0 X 2,000 10,000 -10,000 0 AEP $6,000 4,000 2,000 2,000 X 0x -2,000 X ) 0 X

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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