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

question 47

Multiple Choice

Ponoco Corporation, which has current earnings and profits (CE&P) of $10,000 and accumulated earnings and profits (AE&P) of $30,000, makes a $41,000 distribution to its sole shareholder, Greg, at the end of the current year.Greg has a basis in his Ponoco stock of $2,000.What is the amount of taxable income Greg must report from the Ponoco distribution?

• A)$1,000
• B)$10,000
• C)$40,000
• D)$41,000

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Definitions:

Z-score

A statistical measurement of a score's relationship to the mean in a group of scores.

Sampling Distribution

A distribution of probabilities associated with a particular statistic, originating from a random sample.

Random Sample

A subset of a statistical population in which each member of the subset has an equal probability of being chosen.

Sampling Distribution

The likelihood distribution of a specific statistic derived from a random sampling.