Moranza Corporation, Which Has Current Earnings and Profits (CE&P) of $10,000

question 64

Multiple Choice

Moranza Corporation, which has current earnings and profits (CE&P) of $10,000 and accumulated earnings and profits (AE&P) of $30,000, makes a $15,000 distribution to its sole shareholder, Justin, at the end of the current year.Justin has a basis in his Moranza stock of $2,000.What is the amount of taxable income Justin must report from the Moranza distribution?

• A)0
• B)$10,000
• C)$12,000
• D)$15,000

---

Definitions:

Congruent Nonverbal Cues

Nonverbal behaviors that match or are in harmony with the verbal message being communicated, enhancing understanding and trust.

False Reassurance

Providing comfort or assurance to a patient without a factual basis or in a manner that might obscure the truth of their condition or prognosis.

Terminal Illness

A disease or condition that is incurable and expected to lead to an individual's death.

Dementia

A broad category of brain diseases that cause a long-term and often gradual decrease in the ability to think and remember, affecting daily functioning.