Determining the Taxability of S Corporation Distributions: Part II 

    S CORPORATIONS 
    by Tony Nitti, CPA, MST 
    Published February 01, 2014

     

    EXECUTIVE
    SUMMARY

     
    • Photo by Roman Sakhno/iStock/ThinkstockThe tax treatment of a distribution by an S corporation with accumulated E&P depends on the balance of the corporation’s accumulated adjustments account (AAA), its E&P, the stock basis of the shareholder who received the distribution, and the order in which adjustments must be made to these account balances.
    • Previously taxed income (PTI), an S corporation item that was eliminated in 1983, may still exist in some S corporations as a shareholder-level account. Shareholders with PTI in S corporations with accumulated E&P receive PTI distributions before receiving distributions from E&P.
    • An S corporation can make cash distributions out of AAA after its S election terminates during its post-termination transition period (PTTP). PTI may not be distributed during that period, however.
    • An S corporation can make a number of elections to change the ordering of the distribution of AAA, PTI, and E&P.

    Part I of this article, in the January issue, examined the role a shareholder’s basis in S corporation stock, earnings and profits (E&P), and the accumulated adjustments account (AAA) play in determining the taxability of an S corporation’s distributions and the rules for determining the taxability of distributions from an S corporation with no accumulated E&P. In Part II, this article covers the taxability of distributions from an S corporation with accumulated E&P and ancillary issues and planning opportunities. Before reading Part II, readers should review Part I on the proper adjustments to be made to stock basis, E&P, and AAA before determining how a distribution is taxed.

    Taxability of Distributions From S Corporations With Accumulated E&P

    When a distribution is made from an S corporation with accumulated E&P, it must be analyzed to determine its source to preserve the different treatment of distributions of S corporation income, which should not be taxed a second time, from distributions of C corporation E&P, which must be taxed as a dividend to the recipient shareholder.

    Sec. 1368(c) accomplishes this task by dividing a distribution made from an S corporation with accumulated E&P into three tiers, determining the taxability to the recipient shareholders as follows:

    Tier 1: To the extent the AAA balance is positive, the distribution is treated as if made by an S corporation with no accumulated E&P.

    Tier 2: Distributions in excess of AAA are treated as dividends to the extent of the accumulated E&P balance.

    Tier 3: Distributions in excess of accumulated E&P are treated as made by an S corporation with no accumulated E&P.

    While these tiers often appear confusing, a closer examination reveals the logic—the goal of preserving the difference between distributions of S corporation income and C corporation E&P.

    By providing that the first dollars of distribution are treated as having been made from an S corporation with no E&P to the extent of the AAA balance, the regulations permit a corporation to distribute its remaining previously taxed but undistributed income before the corporation will be deemed to have distributed its accumulated E&P. This does not mean, however, that the distribution is tax free; it simply means that the distribution will not be a taxable dividend. To determine the distribution’s taxability, the shareholder must adjust his or her basis in the corporation’s stock. As discussed in Part I, the distribution will first be treated as a tax-free reduction of the shareholder’s stock basis, with any distribution in excess of basis generating capital gain.

    Once a distribution has reduced a corporation’s AAA to zero, the regulations rationalize that because all previously earned S corporation income has been distributed, the next dollars of distribution are made from the corporation’s accumulated E&P and must be taxed as a dividend until the E&P balance has been reduced to zero.

    After the corporation’s accumulated E&P has been fully distributed, the corporation can no longer make a taxable dividend, and, as a result, the only attribute that becomes relevant to determining the distribution’s taxability is the shareholder’s basis in the corporation’s stock. Thus, the distribution will again be treated as a tax-free reduction of the shareholder’s stock basis, with any distribution in excess of basis generating capital gain.

    When a distribution is made from an S corporation with accumulated E&P, three separate attributes—AAA, E&P, and shareholder’s stock basis—must be adjusted to determine the distribution’s taxability. As the following example illustrates, the attributes must be adjusted in a specific order.

    Example 1: A owns 100% of S Co., an S corporation. On Jan. 1, 2013, S Co. has AAA of $2,500 and prior accumulated E&P of $7,500. Also on Jan. 1, 2013, A has an adjusted basis in S Co. stock of $10,000. During 2013, S Co. allocates to A $9,000 of ordinary income and $2,000 of long-term capital loss. S Co. also distributes $11,000 to A.

    To determine the taxability of the $11,000 distribution, the distribution must be divided into three tiers:

    Tier 1: The $11,000 distribution will be treated as having come from an S corporation without accumulated E&P to the extent of the positive AAA balance. This requires the AAA balance to be computed first.

    To adjust S Co.’s beginning AAA balance of $2,500, it must first be determined whether S Co. has a net positive adjustment or a net negative adjustment for 2013. Because S Co.’s $9,000 of income exceeds its $2,000 of losses by $7,000, S Co. has a $7,000 net positive adjustment. S Co. must therefore increase its AAA by the $7,000 net positive adjustment before accounting for the $11,000 distribution.

    AAA is increased from $2,500 to $9,500 by the $7,000 net positive adjustment, leaving S Co. with a positive AAA balance of $9,500. Thus, the first $9,500 of the $11,000 distribution is treated as having come from an S corporation with no accumulated E&P and is not taxed as a dividend. However, this result does not mean the distribution is tax free to A; rather, A must determine the $9,500 distribution’s taxability by reference to his basis in the S Co. stock.

    Tier 2: Tier 1 accounted for only $9,500 of the $11,000 distribution. The remaining $1,500 distribution is treated as having come from S Co.’s accumulated E&P balance of $7,500, reducing the E&P balance to $6,000. The entire $1,500 distribution made under Tier 2 is taxed as a dividend, and the resulting dividend income does not increase A’s basis in his S Co. stock, nor does this portion of the distribution by S Co. reduce S Co.’s AAA or A’s stock basis.

    Tier 3: The distribution does not exceed the E&P balance, so no portion of the distribution is allocated to Tier 3.

    Because of the potential confusion caused by tracking multiple attributes, a distribution should be accounted for in table form, separating the distribution between the portion that is not from E&P and is included in Tiers 1 and 3 (column S) from the portion that is made from E&P and included in Tier 2 (column C), as shown in Exhibit 1.



    Next, A must adjust his stock basis to determine the taxability of the $9,500 distribution that is included under Tiers 1 and 3 and not taxed as a dividend (column S), as shown in Exhibit 2.

    In summary, $9,500 of the $11,000 distribution is a tax-free reduction of A’s stock basis. The remaining $1,500 distribution is taxed as a dividend to A.

    When a distribution exceeds both AAA and E&P, the remaining distribution is treated as having been made from an S corporation with no E&P. Thus, AAA once again becomes irrelevant in determining the taxability of any future distributions.





    Example 2:
    A owns 100% of S Co., an S corporation. On Jan. 1, 2013, S Co. has AAA of $200 and prior accumulated E&P of $500. Also, on Jan. 1, 2013, A has an adjusted basis in the S Co. stock of $1,000. During 2013, S Co. allocates to A $200 of ordinary income and $900 of long-term capital loss. S Co. also makes a $1,000 distribution to A.

    During 2013, S Co. generated $200 of income and a $900 long-term capital loss, resulting in a $700 net negative adjustment. S Co. is required to reduce AAA for the distribution before accounting for the net negative adjustment.

    S Co. reduces its $200 balance in AAA to zero, but distributions cannot reduce AAA below zero. Therefore, only the first $200 of the $1,000 distribution is included under Tier 1 and treated as a distribution made from an S corporation with no accumulated E&P. Once AAA has been reduced to zero by the distribution, S Co. must next reduce AAA for the net negative adjustment, reducing AAA to a negative balance of $700.

    The next $500 of distribution is deemed to have come from S Co.’s accumulated E&P under Tier 2 and is taxed to A as a dividend.

    The remaining $300 of distribution is included in Tier 3 and is treated as a distribution made from an S corporation with no accumulated E&P. Because E&P has been reduced to zero, future S Co. distributions will all be taxed under the rules governing S corporations with no accumulated E&P.

    The adjustments to AAA and E&P and the allocation of the distribution are illustrated in Exhibit 3.

    To determine the taxability of the $500 distribution that was not taxed as a dividend to A, A must adjust his basis in the S Co. stock as shown in Exhibit 4.

    When an S corporation begins a year with negative AAA, the AAA balance must be restored to a positive balance before the corporation can make a nondividend distribution.











    Example 3:
    A owns 100% of S Co., an S corporation. On Jan. 1, 2013, S Co. has a negative balance of $7,000 of AAA and $10,000 of E&P. Also, on Jan. 1, 2013, A has a $0 basis in his S Co. stock. During 2013, S Co. allocates to A $10,000 of ordinary income and a $4,000 long-term capital loss. S Co. also makes a $5,000 distribution to A.

    Because S Co. has a net positive adjustment of $6,000 during 2013 ($10,000 income less $4,000 loss), S Co. must increase its AAA balance before reducing AAA for the $5,000 distribution. The $6,000 increase to S Co.’s AAA is not enough, however, to restore AAA to a positive balance. Thus, the first dollars of distribution are deemed to have come from S Co.’s accumulated E&P and are taxed as a dividend to A, as shown in Exhibit 5.

    The entire $5,000 distribution is made from E&P and has no effect on A’s basis in his S Co. stock. A must adjust his basis in the S Co. stock as shown in Exhibit 6.

    The previous example illustrates the importance of accurately projecting annual income and loss when an S corporation begins the year with a negative balance in its AAA. If the corporation wants to make a nondividend distribution, care must be taken to ensure that the net positive adjustment for the year will be large enough to restore AAA to a positive balance in excess of the anticipated distribution.

    Because AAA is not increased for tax-exempt income,1 an S corporation with accumulated E&P may want to avoid holding tax-exempt investments, as the resulting income cannot be distributed tax free.

    Example 4: A owns 100% of S Co., an S corporation. On Jan. 1, 2013, S Co. has AAA of $0 and accumulated E&P of $1,000. Also, on Jan. 1, 2013, A has a $1,000 basis in S Co. stock. During 2013, S Co. allocates to A $500 of tax-exempt interest and distributes the $500 to A.

    Even though S Co. is distributing income that was included in A’s basis in his S Co. stock, because the tax-exempt income does not increase AAA, the distribution is treated as having come entirely from accumulated E&P, as shown in Exhibit 7. A must adjust his basis as shown in Exhibit 8.



    When an S corporation with E&P makes multiple distributions during a year that exceed the AAA’s adjusted balance, the distributions do not reduce AAA on a chronological basis; rather, the AAA for the year must be allocated among the distributions by multiplying the adjusted AAA by a fraction, the numerator of which is the amount of the distribution and the denominator of which is the total distributions made during the year. Any remaining amount of each distribution is deemed to have come from E&P in the order in which the distributions were made.2

    Example 5: A owns 100% of S Co., an S corporation. On Jan. 1, 2013, S Co. has $5,000 of AAA and $37,000 of accumulated E&P. During 2013, S Co. generates $3,000 of net income. On April 1, 2013, S Co. makes a $4,000 distribution to A. On April 30, A sells his stock to B. On Dec. 31, S Co. makes a $12,000 distribution to B.

    Because the total distributions of $16,000 exceed S Co.’s adjusted balance of its AAA of $8,000 ($5,000 beginning balance plus $3,000 net positive adjustment), S Co. must allocate a portion of its AAA to each distribution based on the following formula: Adjusted AAA × distributions ÷ total distributions.

    Thus, of the $4,000 distribution made from S Co. to A, $2,000 ($8,000 × $4,000 ÷ $16,000) is treated as having been made from AAA. The remaining $2,000 of the distribution is treated as having been made from E&P and is taxed as a dividend to A.

    Of the $12,000 distribution made from S Co. to B, $6,000 ($8,000 × $12,000 ÷ $16,000) is treated as having been made from AAA. The remaining $6,000 of the distribution is treated as having been made from E&P and is taxed as a dividend to B.

    When an S corporation redeems a portion of its stock in a transaction qualifying as a sale or exchange under Sec. 302(a), the corporation is required to reduce AAA by the proportionate share of stock redeemed.3

    Example 6: A owns 20% of S Co. In 2013, S Co. redeems A’s stock for $2,000 when S Co.’s AAA balance was $5,000. S Co. is required to reduce its AAA by 20%, or $1,000, to account for the redemption.

    If an ordinary distribution is made in the same year as a redemption, AAA must be reduced for the ordinary distribution before being reduced for the redemption, regardless of the order in which the distribution and redemption took place.4

    Example 7: Assume the same facts as in the previous example, except S Co. also makes a $2,000 ordinary distribution to the remaining S Co. shareholders after the redemption of A’s shares. Although the ordinary distribution occurred after the redemption of A’s shares, S Co. must first reduce AAA from $5,000 to $3,000 to account for the ordinary distribution, and then reduce the remaining AAA balance by $600 ($3,000 × 20%).

    Additional Considerations

    Property Distributions

    When an S corporation distributes appreciated property to its shareholders, Sec. 311(b) provides that the corporation must recognize gain as if it sold the property for its fair market value (FMV).5 For these purposes, the FMV cannot be less than any liabilities to which the property is subject and that the distributee assumed.6 Each shareholder must then increase his or her basis in the corporation’s stock for his or her share of the gain.7

    The S corporation is then treated as having made a distribution equal to the FMV of the property, less any liabilities the shareholder assumed.8

    Example 8: A owns 100% of S Co., an S corporation. S Co. distributes property with a basis of $100 and an FMV of $1,000. S Co. has no accumulated E&P, and A has a basis in S Co. stock of $200.

    Upon the distribution of the property to A, S Co. must recognize gain of $900 under Sec. 311(b). This gain increases A’s basis in the S Co. stock from $200 to $1,100. A is then treated as having received a distribution of $1,000, the FMV of the property. This reduces A’s basis from $1,100 to $100, and the entire distribution is tax free.

    When property is distributed with an FMV that is less than its adjusted tax basis, the S corporation is barred from recognizing a loss by Sec. 311(a). The recipient shareholder is treated as having received a distribution equal to the property’s FMV less any liabilities the shareholder assumed.9 This results in a step-down of basis without the corresponding loss being recognized by the S corporation, making distributions of loss property a bad idea. As an alternative, the S corporation should consider selling the property to an unrelated party to trigger the loss, and then distribute the cash to its shareholders.

    Other Adjustments Account

    Form 1120S, U.S. Income Tax Return for an S Corporation, refers to the corporation’s other adjustments account (OAA). The OAA reconciles those items that increase or decrease a shareholder’s stock basis but not AAA, primarily tax-exempt income and deductions attributable to tax-exempt income.10 The OAA is purely an administrative reconciling item; it is not contained in the statute or regulations and thus has no impact on the taxability of an S corporation’s distributions.

    Previously Taxed Income

    Before the Subchapter S Revision Act of 198211 created AAA on Jan. 1, 1983, the cumulative undistributed income of an S corporation was tracked in the previously taxed income (PTI) account. Unlike AAA, however, PTI was a shareholder-level attribute.12 Any PTI attributable to a shareholder on Dec. 31, 1982, was frozen at that time.

    A shareholder with pre-1983 PTI may continue to receive distributions from that account. If an S corporation has E&P, a distribution is treated as having been made from the PTI account after reducing AAA but before reducing E&P.13 Only distributions of cash may reduce PTI; property distributions in excess of AAA bypass PTI and are treated as having been made from E&P.14

    Example 9: S Co. elected to be taxed as an S corporation on Jan. 1, 1980. On that date, S Co. had $20,000 of accumulated E&P. On Dec. 31, 1982, S Co. had $35,000 of PTI allocated to its sole shareholder, A. From 1983 through 2013, S Co. accumulated $150,000 of AAA. On Dec. 31, 2013, S Co. distributes $180,000 to A.

    The $180,000 distribution first reduces AAA from $150,000 to zero. The next dollars of distribution come first from PTI rather than E&P. Thus, the remaining $30,000 distribution reduces the PTI account from $35,000 to $5,000, and none of the distribution is treated as having come from E&P. To the extent the $180,000 does not exceed A’s basis in the S Co. stock, it will be tax free; to the extent it exceeds A’s stock basis, it will generate capital gain.

    Distributions After Termination of the S Election

    When an S corporation revokes or terminates its S election, it reverts to being treated as a C corporation, and under the general rules of Secs. 316 and 301, any distributions by the corporation would first be treated as having been made from current or accumulated E&P and taxed as a dividend. However, just as Sec. 1368 is designed to ensure that distributions of E&P are taxed as a dividend when made from an S corporation, Sec. 1371(e)(1) allows an S corporation with AAA that revokes or terminates its S election to distribute its ending balance of AAA before the distribution will be treated as having been made from a C corporation.15 To qualify for this treatment, the distribution must meet several requirements. First, the distribution must be made in cash, not property. Next, the distribution must be made during the post-termination transition period (PTTP).16

    The PTTP begins on the day after the last day of the corporation’s last tax year as an S corporation and ends on the later of two dates:17

    1. One year from that date, or
    2. The due date of the final S corporation return, including extensions.

    In addition, the statute provides for an additional PTTP in the event of a subsequent IRS audit. This period runs from:

    1. The 120-day period beginning on the date of any determination from an audit of the corporation that follows the termination of the corporation’s election and that adjusts a subchapter S item of income, loss, or deduction that arose during the S corporation period, and
    2. The 120-day period beginning on the date of a determination that the corporation’s subchapter S election had terminated for a previous tax year.

    During the PTTP, a distribution by a former S corporation will be treated as having first been made from the final balance of its AAA.18 Only after AAA is reduced to zero are distributions treated as having come from a C corporation.19

    Example 10: On Dec. 31, 2012, S Co., an S corporation, revokes its S election when S Co. has an AAA balance of $20,000 and an E&P balance of $40,000. On June 1, 2013, S Co. distributes $20,000 to its shareholders. Even though S Co. is now a C corporation, because the $20,000 distribution was made during the PTTP, it is treated as having been made from S Co.’s final AAA balance rather than from E&P. The distribution will first represent a tax-free reduction of the recipient shareholders’ basis in the corporation’s stock, with any excess distribution generating capital gain.

    Any remaining PTI balance attributable to an S corporation shareholder does not survive the termination of the S election and may not be distributed during the PTTP. Thus, an S corporation that plans to revoke its S election—or anticipates its S status terminating—should take steps to distribute PTI before the revocation or termination to ensure that the distribution will not be taxed as a dividend.20

    Optional Elections to Distribute E&P Before AAA and PTI

    In certain situations, an S corporation with accumulated E&P may wish to distribute E&P before distributing its AAA balance. For example, the corporation may have “excess net passive investment income” under which the presence of E&P may trigger corporate-level tax or may terminate the S election.21 Alternatively, a shareholder may wish to receive a taxable dividend in order to use an expiring net operating loss. Or, as was the case at the end of 2012, the threat of increasing tax rates on dividend income may prompt an S corporation to purge its E&P balance before rates rise.

    An S corporation with significant AAA or PTI, however, will face challenges in distributing its E&P balance under the general rules because the corporation may not possess enough cash to distribute the AAA and PTI balances. Fortunately, the regulations provide three elections that enable a corporation to reverse the general ordering rules and distribute E&P before distributing AAA or PTI.

    Under Regs. Sec. 1.1368-1(f)(2), a corporation may elect to distribute AAA after E&P. Thus, the first dollars distributed during the year are taxed as a dividend, and only after E&P is fully purged is a distribution treated as having been made from AAA.

    Example 11: S Co., an S corporation, has $40,000 of AAA and $20,000 of E&P on Dec. 31, 2012. S Co. distributes $20,000 to its shareholders during 2012.

    Anticipating rising tax rates on dividend income, S Co. elects to bypass AAA and have the distribution treated as having been made first from E&P. As a result, the entire $20,000 distribution is taxed as a dividend to S Co.’s shareholders, reducing S Co.’s E&P balance from $20,000 to $0.

    Note, however, that if a corporation that makes the election to distribute AAA after E&P still has PTI allocable to a shareholder, the PTI balance continues to be distributed before E&P, making the distribution order PTI-E&P-AAA. This result may be desirable if the corporation plans to revoke its S status because, as previously discussed, the PTI balance cannot be distributed tax free during the PTTP.

    Example 12: Assume the same facts in Example 11, except S Co. also has $20,000 of PTI attributable to its shareholders. S Co. plans to revoke its S election during 2013. If S Co. makes the election under Regs. Sec. 1.1368-1(f)(2), the $20,000 distribution will first be treated as having been made from PTI, and none of the distribution will be taxed as a dividend.

    If the goal is to have E&P distributed before both AAA and PTI, however, a second election is available that, when made in conjunction with the election to bypass AAA, will change the ordering rules once again. This election, in Regs. Sec. 1.1368-1(f)(4), allows an S corporation to distribute E&P before AAA and PTI, making the distribution order E&P-AAA-PTI and permitting the first dollars of distribution to be taxed as a dividend to the recipient shareholders.22

    Example 13: Assume the same facts as the previous example, except S Co. also makes the election under Regs. Sec. 1.1368-1(f)(4) to bypass PTI. The $20,000 distribution will first be treated as having come from E&P and will be taxed as a dividend.

    If a corporation does not have the cash necessary to purge its E&P balance, the regulations permit the corporation to make a deemed distribution of all or part of its E&P balance. The deemed distribution is treated as having been received by the shareholders and immediately recontributed to the S corporation, providing the recipient shareholders with an increase to their basis in the stock.

    Upon making this election, the corporation is treated as having also made the election to bypass AAA.

    Example 14: S Co., an S corporation, has $40,000 of AAA and $20,000 of E&P on Dec. 31, 2012. S Co. does not have any cash available to distribute, but anticipating rising tax rates on dividend income, S Co. wishes to fully purge its E&P. S Co. files an election under Regs. Sec. 1.1368-1(f)(3) to make a deemed dividend of $20,000. As a result, S Co. is treated as having made a cash distribution of $20,000 to its shareholders, who in turn are treated as having immediately recontributed the $20,000 to S Co.

    These elections are irrevocable and apply only for the year for which they are made. All three elections must be made on an original or amended return by the extended due date for that tax year, and each shareholder who received an actual or deemed distribution during the year must consent to the election.23 This timing provides the benefit of hindsight. For example, an S corporation that does not make a cash distribution in year 1 may discover in year 2 that tax rates on dividend income have increased substantially. Provided the election is made on an original or amended return by the extended due date for the year 1 tax return, S Co. may purge its E&P before the rates increase.

    While at first blush Sec. 1368 and the related regulations appear to present a maze of tiers, attributes, and ordering rules, recognizing the consequences arising from an S corporation distribution should not present a particularly daunting challenge for a practitioner who has a firm understanding of the intent of the distribution rules and the relevant shareholder- and corporate-level attributes that drive a distribution’s taxability.

    Footnotes

    1 See the discussion in Part I, in the January 2014 issue.

    2 Regs. Sec. 1.1368-3, Example (8).

    3 Regs. Sec. 1.1368-2(d)(1)(i). A similar rule applies to the reduction in accumulated E&P. See Sec. 312(n)(7).

    4 Regs. Sec. 1.1368-2(d)(1)(ii).

    5 Via Sec. 1371(a).

    6 Sec. 336(b).

    7 The corporate-level gain also increases AAA, but it should not increase E&P. Note, the corporation does not pay tax on the gain recognized under Sec. 311(b) unless the gain is subject to the built-in gains rules of Sec. 1374.

    8 Sec. 301(b). The FMV of the distributed property should reduce AAA—but not below zero—to the extent the distribution is not taxed as a dividend. If the distribution is taxed as a dividend, the property’s FMV should reduce E&P.

    9 If the distribution is taxed as a dividend, the reduction to E&P is limited to the basis of the property under Sec. 312(a)(3).

    10 Also included in the OAA are payments of tax attributable to prior C corporation years. These payments should presumably reduce any accumulated E&P of the S corporation from prior C corporation years.

    11 Subchapter S Revision Act of 1982, P.L. 97-354.

    12 As a result, if a shareholder with PTI sold his stock, the transferee shareholder would not inherit the transferor shareholder’s PTI balance.

    13 Regs. Sec. 1.1368-1(d)(2).

    14 Id.

    15 However, an S corporation can elect under Sec. 1371(e)(2) to not have this rule apply.

    16 Sec. 1371(e)(1).

    17 Sec. 1377(b).

    18 Sec. 1371(e).

    19 Note, because tax-exempt income does not increase AAA, tax-exempt investments are still not advisable even if the S corporation has no E&P, because the tax-exempt income will not be permitted to be distributed during the PTTP.

    20 Please see the ensuing discussion regarding the election available to distribute PTI before E&P and AAA.

    21 Secs. 1362(d)(3) and 1375.

    22 Regs. Sec. 1.1368-1(f)(4). Alternatively, if an S corporation desires to make its distribution order AAA-E&P-PTI, it would make the election under Regs. Sec. 1.1368-1(f)(4) to distribute E&P before PTI, but not the election under Regs. Sec. 1.1368-1(f)(2) to distribute E&P before AAA.

    23 Regs. Sec. 1.1368-1(f)(5).

     

    EditorNotes

    Tony Nitti is a partner with WithumSmith+Brown PC in Aspen, Colo. For more information about this article, contact Mr. Nitti at anitti@withum.com.




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