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Carmen Corp. terminates its S status at the end of 2019. It had a beginning...

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Accounting

Carmen Corp. terminates its S status at the end of 2019. It had a beginning of the year AAA balance of $20,000 and ordinary income for the year of $5,000.

What amount of distributions may be made tax-free to its shareholders in 2019?

If the distributions above are not made in 2019, what are the tax effects to Carmen heading into 2020 once it loses its S status (specific to the AAA balance)?

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