A deficit in current E & P is treated as occurring ratably during the year unless the taxpayer can show otherwise.

Question

Quizplus · Accepted Answer

The Internal Revenue Code allows for a deficit in current Earnings and Profits (E&P) to be treated as occurring ratably throughout the tax year unless the taxpayer provides sufficient evidence to allocate the deficit to a different period within the year. This approach simplifies the calculation of E&P for purposes such as dividend distributions.

A Deficit in Current E & P Is Treated as Occurring