Author Question: A calendar-year corporation has a $15,000 current E&P deficit and a $40,000 positive accumulated E&P ... (Read 63 times)

leo leo · **on:** Sep 13, 2020

Question 1

The books and records of Finton Corporation, an accrual method taxpayer, reflect the following:

Based on the above, what is the amount of Greg Corporation's current earnings and profits for this year?

Question 2

A calendar-year corporation has a $15,000 current E&P deficit and a $40,000 positive accumulated E&P balance. The shareholders of the corporation have a total basis in outstanding shares of $30,000. A $75,000 distribution is made to the shareholders on the last day of the year. The tax results to the shareholders will be
◦ dividend income of $25,000, a tax-free return of capital of $30,000, and capital gain of $20,000.
◦ dividend income of $0, a tax-free return of capital of $30,000, and capital gain of $45,000.
◦ dividend income of $25,000, a tax-free return of capital of $5,000, and capital gain of $45,000.
◦ dividend income of $40,000, a tax-free return of capital of $30,000, and capital gain of $5,000.

karmakat49 · **Reply #1 on:** Sep 13, 2020

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