Money, Inc., a calendar year S corporation in Denton, Texas, has two unrelated shareholders, each owning 50% of the stock. Each shareholder recorded a $400,000 stock basis as of January 1. At the beginning of the tax year, Money reports balances in AAA of $300,000 and AEP of $600,000. During the year, Money generates operating income of $100,000. At the end of the year, Money distributes securities worth $1,000,000, with an adjusted basis of $800,000.
a. At the end of the year, before the distribution, each shareholder's basis is $
b. After the distribution, each shareholder's basis is $ .
c. Each shareholder has $ of dividend income.
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Money, Inc., a calendar year S corporation in Denton, Texas, has two unrelated shareholders, each ow...
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