Problem LO
On January Kinney, Inc., an S corporation, reports $ of accumulated E & P and
a balance of $ in AAA. Kinney has two shareholders, Erin and Frank, each of whom
owns shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the
year is $
Kinney distributes $ to each shareholder on July and it distributes another $ to
each shareholder on December
How are the shareholders taxed on the distributions? Ignore the QBI deduction.
Round any division to five decimal places. If required, round final answers to the
nearest dollar.
Erin and Frank each report $
dividend income for the July distribution and $
each for the December distribution. Assuming that the shareholders have
sufficient basis in their stock, Erin and Frank each receive a taxfree $
distribution from AAA.
ONLY NEED HIGHLIGHTED BOX. THANKS!
