Austin Corporation Reports Positive Current E&P of $200,000 and Negative

question 32

Essay

Austin Corporation reports positive current E&P of $200,000 and negative accumulated E&P of $300,000.Austin distributed $250,000 to its sole shareholder, Betsy Bevo, on December 31, year 1.Betsy's tax basis in her stock is $125,000.How much of the $250,000 distribution is treated as a dividend to Betsy and what is her tax basis in Austin stock after the distribution?

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Definitions:

Social Skills Training

A therapeutic approach aimed at improving interpersonal skills through teaching and practice.

Operant Conditioning

A teaching method where the intensity of an action is altered through rewards or penalties.

Observational Learning

The process of acquiring skills, knowledge, or behavior by observing and modeling others.

Systematic Desensitization

A behavior therapy technique used to reduce phobia or anxiety through controlled exposure to the fear stimulus, paired with relaxation techniques.