Cedar Corporation is a calendar year taxpayer formed in 2010. Cedar's E & P for each of the past 5 years is listed below. Cedar Corporation made the following distributions in the previous 5 years.
2013 Land (basis of $70,000, fair market value of $80,000)
2010 $20,000 cash
Cedar's accumulated E & P as of January 1, 2015 is:

Question

Cedar Corporation is a calendar year taxpayer formed in 2010. Cedar's E & P for each of the past 5 years is listed below.  Cedar Corporation made the following distributions in the previous 5 years.
2013 Land (basis of $70,000, fair market value of $80,000)
2010 $20,000 cash
Cedar's accumulated E & P as of January 1, 2015 is:

Quizplus · Accepted Answer

To calculate Cedar Corporation's accumulated E&P as of January 1, 2015, we need to start with the beginning E&P balance for 2010, which is $60,000 ($20,000 distributed in 2010 reduces the E&P balance for that year to $60,000). We then add the net income or loss for each subsequent year and subtract any distributions made in those years.

2011: +$30,000
2012: +$10,000
2013: +$15,000
2014: -$20,000 (distributions reduce E&P)

So, the accumulated E&P as of January 1, 2015 is:

$60,000 (beginning balance) + $30,000 + $10,000 + $15,000 - $20,000 = $95,000

Therefore, the correct answer is B, $95,000.

Cedar Corporation Is a Calendar Year Taxpayer Formed in 2010