Any Distribution of Cash or Property by a Corporation That

question 112

True/False

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to S stock during a post-termination transition period of approximately one year is applied against and reduces the basis of the S stock.

---

Definitions:

Sales Commissions

Payments made to sales personnel based on the value or volume of sales they have made, usually a percentage of the sale price.

Net Operating Income

Calculated as revenues minus expenses, excluding taxes and interest, representing the profit generated from normal business operations.

Monthly Sales

The total revenue or the number of units sold by a business in one calendar month.

Break-even Point

The point at which total revenues equal total costs, and the business makes neither a profit nor a loss.