At the Beginning of the Current Year,Doug and Alfred Each

question 37

Multiple Choice

At the beginning of the current year,Doug and Alfred each own 50% of Amaryllis Corporation (a calendar year taxpayer) .In July,Doug sold his stock to Kevin for $140,000.At the beginning of the year,Amaryllis Corporation had accumulated E & P of $240,000 and its current E & P is $280,000 (prior to any distributions) .Amaryllis distributed $300,000 on February 15 ($150,000 to Doug and $150,000 to Alfred) and distributed another $300,000 on November 1 ($150,000 to Kevin and $150,000 to Alfred) .Kevin has dividend income of:

• A)$150,000.
• B)$140,000.
• C)$110,000.
• D)$70,000.
• E)None of the above.

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Definitions:

EOM

End of Month, a term often used in the context of finance and accounting to denote processes or evaluations performed at the close of the month.

Settle

To resolve or conclude an agreement or debt, often implies paying off a balance owed.

Invoice

A document sent by a seller to a buyer, detailing a transaction and requesting payment.

Payment

The action or process of paying someone or something or the amount paid.