Acme Corporation, a calendar year S corporation, has $100,000 of Accumulated Earnings and Profits.
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Acme Corporation, a calendar year S corporation, has $100,000 of Accumulated Earnings and Profits. Larry, the sole

shareholder, has adjusted basis of $80,000 in stock basis with a $20,000 in Accumulated Adjustments Accounts. 

1) Determinate the tax aspects if a $50,000 distribution is made to Larry.

2) Determinate the remaining balance in the Accumulated Earnings and Profits and the Accumulated Adjustments Account. 

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AAA-3.docx

AAA
1) The accumulated earnings suggest that the organization has been a C- corporation and has
changed to an S- corporation. In a C- corporation, profit is taxed at corporate and shareholder...

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