105-131.6. Distributions.
(a) Subject to the provisions of subsection (c) of this section, a distribution made by an S Corporation with respect to its stock to a resident shareholder is taxable to the shareholder as provided in Parts 2 and 3 of this Article to the extent that the distribution is characterized as a dividend or as gain from the sale or exchange of property pursuant to section 1368 of the Code.
(b) Subject to the provisions of subsection (c) of this section, any distribution of money made by a corporation with respect to its stock to a resident shareholder during a post-termination transition period is not taxable to the shareholder as provided in Parts 2 and 3 of this Article to the extent the distribution is applied against and reduces the adjusted basis of the stock of the shareholder in accordance with section 1371(e) of the Code.
(c) In applying sections 1368 and 1371(e) of the Code to any distribution referred to in this section:
(1) The term "adjusted basis of the stock" means the adjusted basis of the shareholder's stock as determined under G.S. 105-131.3.
(2) The accumulated adjustments account maintained for each resident shareholder must be equal to, and adjusted in the same manner as, the corporation's accumulated adjustments account defined in section 1368(e)(1)(A) of the Code, except that:
a. The accumulated adjustments account shall be modified in the manner provided in G.S. 105-131.3(b)(1).
b. The amount of the corporation's federal accumulated adjustments account that existed on the day this State began to measure the S Corporation shareholders' income by reference to the income of the S Corporation is ignored and is treated for purposes of this Article as additional accumulated earnings and profits of the corporation. (1987 (Reg. Sess., 1988), c. 1089, s. 1; 1989, c. 728, ss. 1.33, 1.35; 1998-98, s. 6.)
Structure North Carolina General Statutes
North Carolina General Statutes
§ 105-130.3 - Corporations[Effective for taxable years beginning before January 1, 2019]
§ 105-130.4 - Allocation and apportionment of income for corporations.
§ 105-130.5 - Adjustments to federal taxable income in determining State net income.
§ 105-130.5A - Secretary's authority to adjust net income or require a combined return.
§ 105-130.5B - Adjustments when State decouples from federal accelerated depreciation and expensing.
§ 105-130.7A - Royalty income reporting option.
§ 105-130.7B - Limitation on qualified interest for certain indebtedness.
§ 105-130.8A - Net loss provisions.
§ 105-130.10A - Amortization of equipment mandated by OSHA.
§ 105-130.11 - Conditional and other exemptions.
§ 105-130.12 - Real estate investment trusts.
§ 105-130.14 - Corporations filing consolidated returns for federal income tax purposes.
§ 105-130.15 - Basis of return of net income.
§ 105-130.17 - Time and place of filing returns.
§ 105-130.19 - When tax must be paid.
§ 105-130.20 - Federal determinations and amended returns.
§ 105-130.21 - Information at the source.
§ 105-130.25 - Credit against corporate income tax for construction of cogenerating power plants.
§ 105-130.35 - Recodified as § 105-269.5 by Session Laws 1991, c45, s20.
§ 105-130.40 - Recodified as § 105-129.8 by Session Laws 1996, 2nd Extra Session, c13, s3.2.
§ 105-131 - Title; definitions; interpretation.
§ 105-131.2 - Adjustment and characterization of income.
§ 105-131.3 - Basis and adjustments.
§ 105-131.4 - Carryforwards; carrybacks; loss limitation.
§ 105-131.5 - Part-year resident shareholder.
§ 105-131.7 - Returns; shareholder agreements; mandatory withholding.
§ 105-131.8 - Tax credits[Effective for taxable years beginning before January 1, 2022]
§ 105-132 - Recodified as § 105-135 by Session Laws 1967, c1110, s3.
§ 105-151.17 - Recodified as § 105-129.8 by Session Laws 1996, 2nd Extra Session, c13, s3.4.
§ 105-153.4 - North Carolina taxable income defined.
§ 105-153.5 - Modifications to adjusted gross income.
§ 105-153.6 - Adjustments when State decouples from federal accelerated depreciation and expensing.
§ 105-153.7 - Individual income tax imposed.
§ 105-153.8 - Income tax returns.
§ 105-153.9 - Tax credits for income taxes paid to other states by individuals.
§ 105-154 - Information at the source returns.
§ 105-155 - Time and place of filing returns; extensions; affirmation.
§ 105-157 - When tax must be paid.
§ 105-158 - Taxation of certain Armed Forces personnel and other individuals upon death.
§ 105-159 - Federal determinations and amended returns.
§ 105-160.2 - Imposition of tax.
§ 105-160.4 - Tax credits for income taxes paid to other states by estates and trusts.
§ 105-160.6 - Time and place of filing returns.
§ 105-160.7 - When tax must be paid.
§ 105-160.8 - Federal determinations.
§ 105-163.07 - Recodified as § 105-151.21 by Session Laws 1991, c45, s14.