Prior Taxed Income
About Prior Taxed Income:
The Prior Taxed Income (PTI) before 1983 was an account similar to the accumulated adjustment account in an S corporation. When a C corporation becomes an S corporation, it may have prior taxed income. In general, cash distributions from PTI are tax free to the shareholder. Former IRC (check if this IRC provision is current here) §§ 1368(c)(1) and (e)(1).
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