Purchase Solution

S Corporations: Delta Corporation (Handling Cash Distributions)

Not what you're looking for?

Ask Custom Question

Delta Corporation, a calender-year S corporation, has an accumulated adjustments account of $8,000. It also has accumulated earnings and profits from pre-1983 years of $12,000. The sole shareholder receives a $27,000 cash distribution from the corporation. How will this distribution be treated if the shareholder's basis in the stock is $12,200?

Purchase this Solution
Solution Summary

This solution provides answers for cash distributions.

Solution Preview

Given that Delta Corporation elected to take distributions first from ...

Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

View More Free Quizzes
Related BrainMass Solutions

  • Tax Years a Partnership can Elect without IRS Permission

    The BCD Partnership is being formed by three equal partners, Beta Corporation, Chi Corporation, and Delta Corporation. The partners' tax year-ends are June 30 for Beta, September 30 for Chi, and October 31 for Delta.

  • New Corporation Tax Advantages

    Distributions from an S corporation are the same as dividends from a C corporation with respect to withdrawing funds from a corporate entity, except S corporation distributions are not taxable as dividends are in a C corporation.

  • Tax issues: S Corporation vs C Corporation

    Should corporations that may be doing well in the cash department consider paying out dividends in 2009?

  • S Corporations: Delta Corporation

    254404 S Corporations: Delta Corporation Delta Corporation, an S corporation, has $30,000 of taxable income before charitable contributions. The corporation has $5,000 in charitable contributions for the year.

  • Disproportionate Distributions, Interest, S Corp

    Corporations D. 51 unrelated individuals 40) Suppose at the beginning of 2010, Jamaal's basis in his S corporation stock was $27,000 and that Jamaal has loaned the S corporation $10,000.

  • Tax research: Non-liquidating distributions

    523150 Tax research: Non-liquidating distributions Analyze how corporations treat non-liquidating distributions and determine the most likely mistake(s) the client could make that would result in an IRS audit.

  • What is a flow-through entity?

    Dividends as opposed to cash distributions are taxed only at the individual level and currently are taxed at the flat rate of 15% assuming a high individual tax rate. Only C corporations and S Corporations can pay out dividends.

  • Corporate Income Taxes

    As with partnerships, the income, deductions, and tax credits of an S corporation flow through to shareholders annually, regardless of whether distributions are made. Thus, income is taxed at the shareholder level and not at the corporate level.

  • Business Formation and Choice of Entity

    The loans will be available to the owners of an S-corporation or regular corporation. Another way to take out distributions is salary or dividends; however there will be tax consequences.

View More Related Solutions