Tomika Corporation Has Current and Accumulated Earnings and Profits of $0.tomika
Tomika Corporation has current and accumulated earnings and profits of $0.Tomika distributes $10,000 to its sole shareholder,Alana.What are Tomika's earnings and profits after the distribution?
D) none of the above
Exit Corporation has accumulated E&P of $24,000 at the beginning of the current tax year.Current E&P is $20,000.During the year,the corporation makes the following distributions to its sole shareholder who has a $22,000 basis for her stock. The treatment of the $15,000 August 1 distribution would be
A) $15,000 is taxable as a dividend; $5,000 from current E&P and the balance from accumulated E&P.
B) $15,000 is taxable as a dividend from accumulated E&P.
C) $4,000 is taxable as a dividend from accumulated E&P, and $11,000 is tax-free as a return of capital.
D) $5,000 is taxable as a dividend from current E&P, and $10,000 is tax-free as a return of capital.
Oreo Corporation has accumulated E&P of $8,000 at the beginning of the current year.During the year (a nonleap year),the corporation incurs a current E&P deficit of $18,250.The corporation distributes $11,000 on March 20th to Morris,its sole shareholder,who has a $9,000 basis for his stock.If the exact loss cannot be determined as of the date of distribution,the treatment of the distribution will be
A) $4,100 dividend and a $6,900 capital gain.
B) $11,000 return of capital.
C) $4,100 dividend and a $6,900 tax free return of capital.
D) $8,000 dividend and a $3,000 return of capital.
Omega Corporation is formed in 2006.Its current E&P and distributions for each year through 2010 are as follows:
Is the distribution made from current or accumulated E&P? At the beginning of 2011,what is accumulated E&P?