Payment Corporation Has Accumulated E&P of $19,000 and Current E&P

question 59

Essay

Payment Corporation has accumulated E&P of $19,000 and current E&P of $28,000. During the year, the corporation makes the following distributions to its sole shareholder:
$\begin{array}{|l|c|}\hline{\text { Date }} & \begin{array}{c}\text { Amount } \\\text { Distributed }\end{array} \\\hline \text { April 1 } & \$ 20,000 \\\text { Tune 1 } & 20,000 \\\text { August 1 } & 15,000 \\\text { November 1 } & 5,000 \\\hline\end{array}$ The sole shareholder's basis in her stock is $45,000. What are the tax consequences of the June 1 distribution?

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Definitions:

Synergist

A substance, muscle, or agent that works with another to enhance or facilitate an effect or action.

Movement

The change in position or location of an object or person, often within the context of physical activity, mechanics, or biology.

Prime Mover

A muscle or group of muscles whose contraction is chiefly responsible for producing a particular movement.

Dactylospasm

A medical condition characterized by involuntary, spasmodic contractions of the fingers or toes.