Nguyen Corporation, a calendar- year corporation, has a $40,000 current E&P deficit and a $60,000 positive accumulated E&P balance. Also assume that shareholders of the corporation have a total basis in outstanding shares of $35,000. A $75,000 distribution is made to the shareholders on the last day of the year. What is the tax treatment of the $75,000 distribution to the shareholders?

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The Answer of Nguyen Corporation, a calendar- year corporation, has a $40,000 current E&P deficit and a $60,000 positive accumulated E&P balance. Also assume that shareholders of the corporation have a total basis in outstanding shares of $35,000. A $75,000 distribution is made to the shareholders on the last day of the year. What is the tax treatment of the $75,000 distribution to the shareholders?

Nguyen Corporation, a Calendar- Year Corporation, Has a $40,000 Current