A calendar-year corporation has positive current E&P of $500 and a deficit in accumulated E&P of ($1,200) . The corporation makes a $400 distribution to its sole shareholder. Which of the following statements is true?
A) The distribution will not be a dividend because total E&P is a deficit.
B) The distribution may be a dividend, depending on whether total E&P at the date of the distribution is positive.
C) The distribution will be a dividend because current E&P is positive and exceeds the distribution.
D) A distribution from a corporation to a shareholder is always a dividend, regardless of the balance in E&P.
Correct Answer:
Verified
Q11: Siblings are considered "family" under the stock
Q21: Oakland Corporation reported a net operating loss
Q26: Which of the following forms of earnings
Q29: Which statement best describes the concept of
Q31: A calendar-year corporation has deficit in current
Q33: Grand River Corporation reported taxable income of
Q34: Greenwich Corporation reported a net operating loss
Q37: Packard Corporation reported taxable income of $1,000,000
Q38: The "family attribution" rules are automatically waived
Q39: Which of the following statements best describes
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents