Shareholder in a non-liquidating distribution


What is the effect on the AAA if an S corporation distributes a piece of property valued at $10,000 with a $5,000 basis to 50% shareholder and $10,000 cash to the other 50% shareholder in a non-liquidating distribution?

1. $10,000 net increase

2. $5,000 net increase

3. $15,000 net decrease

4. $20,000 net decrease

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Accounting Basics: Shareholder in a non-liquidating distribution
Reference No:- TGS065261

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