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At the beginning of the year, Purple, Inc., an S corporation, had $100,000 in its AAA,...

At the beginning of the year, Purple, Inc., an S corporation, had $100,000 in its AAA, and $50,000 of earnings and profits from prior C corporation years.  During the year, Purple earned $60,000 of ordinary income and paid $200,000 in distributions to its shareholders.  Assume that White owns 25% of Purple, her basis in Purple at the beginning of the year is $30,000, and her share of the distribution was $50,000.  How much, if any, of the distribution is taxable to White as a dividend?

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Answer #1

Soluton tohite ownk 25 % puple , Tnc hie 8hare o kiç dustibutton wa $50000 davidend 50000 X 25% Thorejore dishabuton bxable a

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