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Alik [6]
3 years ago
13

Rayburn owns all the shares of Newcastle Corporation, which operates as an S corporation. Rayburn's basis in the stock is $15,00

0. During the year, he receives a cash distribution of $22,000 from Newcastle. What must Rayburn and Newcastle report as income from the cash distribution?
Business
1 answer:
maksim [4K]3 years ago
7 0

Answer:

$7,000 $-0-

Explanation:

For Rayburn to know what to record from the cash distribution, he will need to subtract his basis in the stock from the cash distribution he receives

Therefore $22 000 - $15 000 = $7 000.

And Newcastle has no income =$-0-

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