AAA


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AAA

The highest bond rating by S&P and Fitch. A rating of AAA is considered to carry virtually no risk; U.S. Treasury securities, for example, always receive the AAA rating. A bond with an AA is investment-grade, meaning that banks are allowed to hold them. AA bonds are low risk and low return. The rating is equivalent of an Aaa rating by Moody's.

AAA

The highest grade assigned to a debt obligation by a rating agency. It indicates an unusually strong capacity to pay interest and repay principal. Also called triple A.
References in periodicals archive ?
The AAA, a corporate-level account, is transferable to new shareholders.
The AAA account survives during the post-termination transition period (generally, one year after termination of the S election); a PTI account is extinguished immediately on S termination.
In several issues of Publication 589, Tax Information on S Corporations, the IRS had (arbitrarily) stated that distributions come from a shareholder's PTI after the AAA has been exhausted.
Only distributions of money that exceed the corporation's AAA reduce PTI.
The income shareholders are required to report on their tax returns is reflected in AAA and adds to their stock bases; thus, distributions from the AAA are tax-free returns of capital.
AAA bypass election: There are times when shareholders would benefit from voluntarily taking a dividend and leaving the AAA intact.
The AAA bypass election may also be useful if a shareholder has excess investment interest, or is temporarily in a low tax bracket, and cannot foresee being able to receive AE&P with lower tax consequences.
1368-1 (f) (2) (i) offers useful guidance on the AAA bypass election; in most cases, the election requires distributions to be taken first from E&P.
In 1996, OLM has a $50,000 AAA (including all anticipated adjustments for 1996) and $10,000 AE&P.