On January 1, Gold Corporation (a calendar year taxpayer) has E & P of $30,000 and generates no additional E & P
during the year. On March 31, the corporation distributes $40,000 to its sole shareholder, Ava (basis in stock of
$8,000). Determine the effect of the distribution on Ava's taxable income and stock basis.

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The Answer of On January 1, Gold Corporation (a calendar year taxpayer) has E & P of $30,000 and generates no additional E & P
during the year. On March 31, the corporation distributes $40,000 to its sole shareholder, Ava (basis in stock of
$8,000). Determine the effect of the distribution on Ava's taxable income and stock basis.

On January 1, Gold Corporation (A Calendar Year Taxpayer) Has