Thank you, I had seen this in my research. The sentence "Ultimately, the owners will have capital gain from receiving distributions in excess of tax basis" is what makes me think I'm wrong in crediting equity for the other side of the AJE, because that would preserve his basis.
Client does not have accumulated E&P because he incorporated and elected S immediately after (on 1/1/2012).
*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*
