At the end of the taxable year B Corporation has current E&P of $50,000 without reduction for any distributions made during the year.The corporation also has accumulated E&P of $45,000.A distribution of $40,000 is made on May 1 and another distribution of $60,000 is made on December 1.B Corporation files on the accrual basis using a calendar year.The distributions are made to its sole shareholder.The amount of accumulated E&P allocated to the December 1 distribution of $60,000 is

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The current E&P of $50,000 is first allocated to the distributions. The May 1 distribution of $40,000 is fully covered by current E&P, leaving $10,000 of current E&P. The December 1 distribution of $60,000 uses the remaining $10,000 of current E&P, leaving $50,000 to be covered by accumulated E&P. Since accumulated E&P is $45,000, the amount allocated to the December 1 distribution is $25,000 ($45,000 - $20,000 already used).

At the End of the Taxable Year B Corporation Has