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

question 97

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: $$\begin{array} { | l | c | } \hline { \text { Date } } & \begin{array} { c } \text { Amount } \\\text { Distributed }\end{array} \\\hline \text { April 1 } & \$ 20,000 \\\text { June 1 } & 20,000 \\\text { August 1 } & 15,000 \\\text { November 1 } & 5,000 \\\hline\end{array}$$ 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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