Problem 12-26 (Algorithmic) (LO. 6, 7) On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $24,000. Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ X dividend income for the July 1 distribution and $ X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free X distribution from AAA.
Problem 12-26 (Algorithmic) (LO. 6, 7) On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $24,000. Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ X dividend income for the July 1 distribution and $ X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free X distribution from AAA.
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 45P
Related questions
Question
ss
![Problem 12-26 (Algorithmic) (LO. 6, 7)
On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two
shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year
is $24,000.
Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are
the shareholders taxed on the distributions? Ignore the 20% QBI deduction.
Do not round intermediate computations. If required, round your final answers to the nearest dollar.
Erin and Frank each report $
X dividend income for the July 1 distribution and $
X each for the
December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a
tax-free
X distribution from AAA.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3f3de750-c79a-4d84-9c2f-7a65c0d876cb%2F6611e8b4-9966-4b06-9ff2-458a560a84be%2F178t56g_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 12-26 (Algorithmic) (LO. 6, 7)
On January 1, 2022, Kinney, Inc., an S corporation, reports $19,200 of accumulated E & P and a balance of $48,000 in AAA. Kinney has two
shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year
is $24,000.
Kinney distributes $28,800 to each shareholder on July 1, and it distributes another $14,400 to each shareholder on December 21. How are
the shareholders taxed on the distributions? Ignore the 20% QBI deduction.
Do not round intermediate computations. If required, round your final answers to the nearest dollar.
Erin and Frank each report $
X dividend income for the July 1 distribution and $
X each for the
December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a
tax-free
X distribution from AAA.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Individual Income Taxes](https://www.bartleby.com/isbn_cover_images/9780357109731/9780357109731_smallCoverImage.gif)
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT