Previous years cash distributions to a shareholder have reduced his or her stock basis to...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Previous years cash distributions to a shareholder have reduced his or her stock basis to zero in an S corporation. How will any further cash distributions be treated for tax purposes if the company continues to have losses?
A
It will be treated as a deemed sale of the shareholders stock.
B
It will be treated as a capital contribution to the corporation.
C
It will receive passive activity loss treatment, subject to any limitations
D
It will be carried over indefinitely to be offset with future earnings.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
