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Tooth Corporation (C-Corporation) is owned 50% by Spring Inc. (C Corp) and 50% by Brianna....

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Accounting

  1. Tooth Corporation (C-Corporation) is owned 50% by Spring Inc. (C Corp) and 50% by Brianna. Spring Inc.s stock basis in Tooth is $65,000. Briannas stock basis in Tooth is $40,000. Tooth Corporation makes a cash distribution on December 31 to Spring Inc. of $100,000 and to Brianna of $100,000. What are the tax consequences if:
    1. Tooth Corporation has AEP of negative $30,000 and CEP of positive $100,000. (2 POINTS)
    2. Tooth Corporation has AEP of positive $40,000 and CEP of positive $20,000. (2 POINTS)
    3. Tooth Corporation has AEP of positive $50,000 and CEP of negative $60,000. (2 POINTS)

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