Green Corporation is a calendar-year taxpayer. All of the stock is owned by Evan. His basis for the stock is $35,000. On March 1 (of a non-leap year), Green Corporation distributes $120,000 to Evan. Determine the tax consequences of the cash distribution to Evan in each of the following independent situations:
Current E&P Accumulated E&P
a) $30,000 $100,000
b) 50,000 (50,000)
c) (73,000) 40,000
d) (20,000) (50,000)

Question

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The Answer of Green Corporation is a calendar-year taxpayer. All of the stock is owned by Evan. His basis for the stock is $35,000. On March 1 (of a non-leap year), Green Corporation distributes $120,000 to Evan. Determine the tax consequences of the cash distribution to Evan in each of the following independent situations:
Current E&P Accumulated E&P
a) $30,000 $100,000
b) 50,000 (50,000)
c) (73,000) 40,000
d) (20,000) (50,000)

Green Corporation Is a Calendar-Year Taxpayer