At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $60,300. The corporation generates no additiona E & P during the year. On December 31, the corporation distributes $90,450 to its sole shareholder, Abby, whose stock basis is $18,090. How does the Federal income tax law treat this distribution? If an amount is zero, enter "0". As a result the distribution Abby has the following: • Dividend income: 60,300 • Return of capital: 18,090 ✔ • Capital gain:
At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $60,300. The corporation generates no additiona E & P during the year. On December 31, the corporation distributes $90,450 to its sole shareholder, Abby, whose stock basis is $18,090. How does the Federal income tax law treat this distribution? If an amount is zero, enter "0". As a result the distribution Abby has the following: • Dividend income: 60,300 • Return of capital: 18,090 ✔ • Capital gain:
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 1CE
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Subject - account
Please help me.
Thankyou.
Transcribed Image Text:At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $60,300. The corporation generates no additional
E & P during the year. On December 31, the corporation distributes $90,450 to its sole shareholder, Abby, whose stock basis is $18,090.
How does the Federal income tax law treat this distribution?
If an amount is zero, enter "0".
As a result the distribution Abby has the following:
• Dividend income: $
60,300
• Return of capital: $
18,090 ✔
• Capital gain:
• Stock basis after the distribution:
0
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