A Calendar-Year Corporation Has a $75,000 Current E&P Amount,and a $25,000

question 116

Multiple Choice

A calendar-year corporation has a $75,000 current E&P amount,and a $25,000 positive accumulated E&P balance at the beginning of the year.Shareholders of the corporation have a total basis in outstanding shares of $40,000.The corporation pays a $120,000 distribution to the shareholders.The tax results to the shareholders will be

• A)dividend income of $100,000 and capital gain of $20,000.
• B)dividend income of $60,000 and capital gain of $60,000.
• C)dividend income of $100,000 and no other consequences.
• D)dividend income of $100,000 and a tax-free return of capital of $20,000.

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Definitions:

Major Neurocognitive Disorder

A decline in cognitive function significant enough to interfere with a person’s independence and daily activities, often related to dementia or Alzheimer's disease.

Cognitive Impairments

Reductions in cognitive functions such as memory, problem-solving, attention, and language.

Cognitive-Behavioral Therapy

A psychotherapeutic approach that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic procedure.

ADHD

Attention-Deficit/Hyperactivity Disorder (ADHD) is a neurodevelopmental disorder characterized by persistent patterns of inattention, hyperactivity, and impulsivity, affecting functioning and development.