The Jane Corporation, an S corporation, makes several property distributions to its two equal shareholders, A and B, during the year. The distributions are as follows:
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A
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B
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Cash
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$5,000
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$5,000
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Land (Basis = $5,000)
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$10,000 (FMV)
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|
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Equipment (Basis = $15,000)
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$10,000 (FMV)
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At the beginning of the year, the corporation's accumulated adjustments account is $35,000; A's basis in his shares is $24,000; and B's basis is $32,000. The corporation reports net income of $6,000 for the year, excluding any effect of the distributions. Determine the basis in A and B's shares and the balance in the corporation's AAA at the end of the year.