Total Corporation Has Earned $75,000 Current E&P and Has an Accumulated

question 43

Multiple Choice

Total Corporation has earned $75,000 current E&P and has an accumulated E&P deficit from prior year of $25,000.The corporation pays a $100,000 distribution to shareholders.Shareholders of the corporation have a total stock basis of $40,000.The tax results of the distributions to the shareholders will be

• A)dividend income of $75,000 and tax-free return of capital of $25,000.
• B)dividend income of $50,000,tax-free return of capital of $40,000 and capital gain of $10,000.
• C)dividend income of $100,000.
• D)dividend income of $60,000 and tax-free return of capital of $40,000.

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Definitions:

Bone Density

The measurement of the quantity of mineral matter per square centimeter of bones, important for diagnosing osteoporosis.

Bone Density

The quantity of mineral matter per square centimeter of bones, important for diagnosing osteoporosis and assessing fracture risk.

Blood Sugar

The concentration of glucose in the blood, important for maintaining energy levels and overall health.

Basal Metabolic Rate

The amount of energy expended while at rest in a neutrally temperate environment, necessary to maintain the basic functions of the body.