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

Question

Quizplus · Accepted Answer

When current E&P is negative, the tax status of the dividend is determined by calculating accumulated E&P on the date of the distribution.

Inca Company Reports Current E&P of Negative $100,000 in 20X3