Aztec Company reports current E&P of $200,000 in 20X3 and accumulated E&P at the beginning of the year of negative $100,000. Aztec distributed $300,000 to its soleshareholder on January 1, 20X3. How much of the distribution is treated as a dividend in20X3?

Question

Quizplus · Accepted Answer

A distribution is treated as a dividend to the extent of current and accumulated E&P. Here, the current E&P is $200,000, so $200,000 of the distribution is treated as a dividend.

Aztec Company Reports Current E&P of $200,000 in 20X3 and Accumulated