Ryan, a U. Citizen, is a sole shareholder of S corporation, named "Ryan's Machine Tool Company". He has $5,000 basis in stock. Ryan also...

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Ryan, a U.S. Citizen, is a sole shareholder of S corporation, named "Ryan's Machine Tool Company". He has $5,000 basis in stock. Ryan also loaned money to S Corporation and has basis of $3,000. Assume no AEP, calendar year and beginning balance of AAA and OAA accounts are zero. The corp. made $10,000 in the ordinary income which was reported on Ryan's K-1.  Corp. also received a tax- free interest income of $4,000 which was also reported on K-1. Ryan took a distribution of $21,000 during the year from the S corporation. Please calculate the year-end balances in AAA account, OAA Account, Ryan's stock basis and loan basis showing the effects of the distribution. Please show your calculations.

Question

Ryan, a U. Citizen, is a sole shareholder of S corporation, named "Ryan's Machine Tool Company". He has $5,000 basis in stock. Ryan also...

  • Written in: 17-Oct-2019
  • Paper ID: 356308
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DATE ANSWERED

Oct 17, 2019

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