Hello and welcome to the session in which we would look at the S distribution. So, what happens when the S corporation distributes assets such as cash or property? Okay, let's take a look at the general rules for the C corporation first. We're going to go back and it's worth looking back at the C corporation. Why? Because if we know how the C corporation works, it's going to be easier for us to understand the S corporation, as we already learned about C Corp distribution. So, what did we learn about C Corp distribution? We learned that if we have current earnings and profits, any distribution to the extent of earnings and profit is considered a dividend. If the distribution is counted from accumulated earnings and profit, it's also considered a dividend. If it's counted from accumulated earnings and profits, we learned about the rules of One S Plus and one is in S or one is minus and one is fast. If you're interested, you can go back and review this. This is just an overview. Then, any amount that is distributed outside current and accumulated earnings and profit is considered the return of capital to cover the basis. Once we exceed the basis, any excess or residual amount paid from the corporation is considered capital gains. Now, let's move from the C corporation to the S corporation. So, what happens when the S corporation distributes income? The first thing we're going to learn about is something called the Accumulated Adjustment Account (AAA). We did not have this account for a C corporation. The AAA represents the cumulative total undistributed separately and non-separately stated items. In a C corporation, income is taxed twice, on the corporate level and when distributed. But in an S corporation, everything flows...