When an S corporation terminates S status, special rules allow it to avoid some of the harsh tax consequences of suddenly becoming a C corporation.Which of the following is not allowed by the post-termination rules?

Question

Quizplus · Accepted Answer

Nontaxable property distributions from Accumulated Adjustments Account (AAA) are not allowed under the post-termination transition rules for S corporations. These rules generally allow for certain benefits to ease the transition from S to C corporation status, but they do not extend to nontaxable property distributions from AAA.

When an S Corporation Terminates S Status, Special Rules Allow