Common use of Distributions that differ in timing Clause in Contracts

Distributions that differ in timing. (i) S, a corporation, has two equal share- holders, A and B. Under S’s bylaws, A and B are entitled to equal distributions. S distrib- utes $50,000 to A in the current year, but does not distribute $50,000 to B until one year later. The circumstances indicate that the difference in timing did not occur by reason of a binding agreement relating to distribu- tion or liquidation proceeds.