Assume the same facts as in above explain the tax

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Problem 12-18Assume the same facts as in Problem 11-40 above. Explain the tax treatment to J if he receives the following distributions during the year.a. $100,000b. $220,000c. $260,000
Problem 12-18Stock ABAAAAEPOAABegin$100,000$143,000$4,000$0Ordinary inc (300 – 120 – 50 - 40)$90,00090,00090,000Tax-exempt income13,00013,00013,000Capital gain7,0007,0007,000Balance before distributions210,000 240,0004,00013,000Distributions $100,000(100,000)Balance before losses200,000Nondeductible entertainment(4,000)(4,000)(4,000)Expenses related to tax exempt ithe own ncome(3,000)(3,000)(3,000)Capital loss(2,000)(2,000)(2,000)And Charitable contribution(5,000)(5,000)(5,000)Balance before distributions for AAA$229,000$4,000$10,000Distribution(100,000)$129,000
26Problem 12-18Stock ABAAAAEPOAABegin$100,000$143,000$4,000$0Ordinary inc (300 – 120 – 50 - 40)$90,00090,00090,000Tax-exempt income13,00013,00013,000Capital gain7,0007,0007,000Balance before distributions210,000 240,0004,00013,000Distributions $100,000(100,000)Balance before losses200,000Nondeductible entertainment(4,000)(4,000)(4,000)Expenses related to tax exempt ithe own ncome(3,000)(3,000)(3,000)Capital loss(2,000)(2,000)(2,000)Charitable contribution(5,000)(5,000)(5,000)Balance before distributions for AAA$229,000$4,000$10,000
Problem 12-18Stock ABAAAAEPOAABegin$100,000$143,000$4,000$0Ordinary inc (300 – 120 – 50 - 40)$90,00090,00090,000Tax-exempt income13,00013,00013,000Capital gain7,0007,0007,000Balance before distributions210,000240,0004,00013,000Distributions $220,000(210,000)Balance before losses0No deduction for capital loss & charitable deduction since NSF basisNondeductible entertainment(4,000)(4,000)(4,000)Expenses related to tax exempt income(3,000)(3,000)(3,000)Capital loss(2,000)(2,000)(2,000)Charitable contribution(5,000)(5,000)(5,000)Balance before distributions for AAA$229,000$4,000$10,000Distribution $220,000(220,000)$9,000
28Problem 12-18Stock ABAAAAEPOAABegin$100,000$143,000$4,000$0Ordinary inc (300 – 120 – 50 - 40)$90,00090,00090,000Tax-exempt income13,00013,00013,000Capital gain7,0007,0007,000Balance before distributions210,000240,0004,00013,000Distributions $220,000(210,000)Balance before losses0No deduction for capital loss & charitable deduction since NSF basisNondeductible entertainment(4,000)(4,000)(4,000)Expenses related to tax exempt income(3,000)(3,000)(3,000)Capital loss(2,000)(2,000)(2,000)Charitable contribution(5,000)(5,000)(5,000)
29$0(14,000)14,000(13,000)27,000( 4,000)31,000(229,000)$260,000Distribution13,0004,0000019,000Balance(229,000)(210,000)19,000AAA$46,00014,00032,00013.00019,000LTCG13,0000004,000Balance(4,000)4,000 AEP(13,000)OAADistributions $260,000$13,000$4,000$229,000$210,000Balance before dists$ 0$ 0$ 0$ 0$4,000Ending balancePaid in capital00004,000BalanceOAAAEPAAAStock ABDIVDProblem 12-18
30Problem 12-18LTCGDIVDStock ABAAAAEPOAABalance before dists$210,000$229,000$4,000$13,000Distributions $260,000$260,000AAA(229,000)19,000(210,000)(229,000)Balance31,000 19,000004,000 13,000AEP( 4,000)4,000 (4,000)Balance27,000 19,0004,000000 13,000OAA(13,000)13.000(13,000)Balance14,000 32,0004,0000000Paid in capital(14,000)14,000Ending balance$0$46,000$4,000$0$0$0$0Distribution
31Problem 12-20A calendar year S corporation has the following balance on January 1, of the current year:Accumulated adjustments account $15,000Accumulated earnings and profits 6,000Other adjustments account This year the S corporation records show $12,000 net ordinary income, $4,000 tax exempt income net of related expenses, and $55,000 cash distributions. Y owns 70 percent of the stock. Her basis in the stock on January l, was $7,000, and she has a note receivable from the corporation of $5,000. Y is single, and her only other income is salary from an unrelated business.a. Calculate the balances in corporate accounts as of December 31.b. Calculate the effect on Y’s adjusted gross income for the year.c. Calculate the basis in Y’s stock and note as of December 31.0
32(12,600)CG 12,600(18,000)Paid in Capital(2,800)CG 2,800(4,000)(4,000)OAA12,600016,100000018,000Balance(4,200)Divd 4,200(6,000)(6,000)AE&P70%70%70%12-20$28,700$13,300CG 700$9,1008,4008,400AGIAAAPTIAE&P

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