Taxation of Businesses

AAA

AAA is like Earnings & Profits earned while an S Corp. Distributions out of it are untaxed (but reduce basis) as it was taxed on a pass-through basis when earned by the corp. When it is depleted, the distributions reduce the E&P earned while the corp was a C Corp and are taxed as dividends. (Then when that's depleted, they come out of basis again, and then count as stock sale gain.)

AAA is like 26 U.S.C. § 1367 as if there was one shareholder.