Solution-Determine the basis in a and b shares

Determine the basis in a and b shares

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Reference no: EM13539888

The Jane Corporation, an S corporation, makes several property distributions to its two equal shareholders, A and B, during the year. The distributions are as follows:

	A	B
Cash	$5,000	$5,000
Land (Basis = $5,000)	$10,000 (FMV)
Equipment (Basis = $15,000)		$10,000 (FMV)

At the beginning of the year, the corporation's accumulated adjustments account is $35,000; A's basis in his shares is $24,000; and B's basis is $32,000. The corporation reports net income of $6,000 for the year, excluding any effect of the distributions. Determine the basis in A and B's shares and the balance in the corporation's AAA at the end of the year.

Reference no: EM13539888

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Determine the basis in a and b shares

Reference no: EM13539888

Reference no: EM13539888

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