How are the distributions taxed to miley

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Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2018 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $183,000 and $477,500 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $159,750. During 2019, Miley's corporation reported $0 taxable income or loss. Also, during 2019 the corporation made distributions to Miley of $96,500 and $71,000.

Problem 1: How are these distributions taxed to Miley assuming the following?

The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on June 15, 2019; the second distribution was a cash distribution and was paid on September 30, 2019.

Reference no: EM132975448

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