At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $32,000. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How is the distribution treated for tax purposes? If an amount is zero, enter "0". As a result of the distribution Abby has the following: • Dividend income: • Return of capital: $ • Capital gain: $ 76,400 X 22,920 X 0 X • Stock basis after the distribution: 0✓
At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $32,000. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How is the distribution treated for tax purposes? If an amount is zero, enter "0". As a result of the distribution Abby has the following: • Dividend income: • Return of capital: $ • Capital gain: $ 76,400 X 22,920 X 0 X • Stock basis after the distribution: 0✓
Chapter5: Corporations: Earnings & Profits And Dividend Distributions
Section: Chapter Questions
Problem 15CE
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Transcribed Image Text:At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $32,000. The corporation generates no additional E
& P during the year. On December 31, the corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How
is the distribution treated for tax purposes?
If an amount is zero, enter "0".
As a result of the distribution Abby has the following:
• Dividend income:
• Return of capital: $
• Capital gain: $
76,400 X
22,920 X
0 X
• Stock basis after the distribution:
0✓
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