Author Question: Total Corporation has earned $75,000 current E&P and has an accumulated E&P deficit from prior year ... (Read 37 times)

fbq8i · **on:** Sep 13, 2020

Total Corporation has earned $75,000 current E&P and has an accumulated E&P deficit from prior year of $25,000. The corporation pays a $100,000 distribution to shareholders. Shareholders of the corporation have a total stock basis of $40,000. The tax results of the distributions to the shareholders will be
◦ dividend income of $75,000 and tax-free return of capital of $25,000.
◦ dividend income of $50,000, tax-free return of capital of $40,000 and capital gain of $10,000.
◦ dividend income of $100,000.
◦ dividend income of $60,000 and tax-free return of capital of $40,000.

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

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