An S corporation's accumulated adjustments account, which measures the amount of earnings that may be distributed tax-free
a. Must be adjusted downward for the full amount of federal income taxes attributable to any taxable year in which the corporation was a C corporation.
b. Must be adjusted upward for the full amount of federal income taxes attributable to any taxable year in which the corporation was a C corporation.
c. Must be adjusted upward or downward for only the federal income taxes affected by capital gains or losses, respectively, for any taxable year in which the corporation was a C corporation.
d. Is not adjusted for federal income taxes attributable to a taxable year in which the corporation was a C corporation.
Answer: D
Tax
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- Income in respect of a cash-basis decedent
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