Robin Corporation, a Calendar Year Taxpayer, Has a Deficit in Current

question 37

Multiple Choice

Robin Corporation, a calendar year taxpayer, has a deficit in current E & P of $200,000 and a $580,000 positive balance in accumulated E & P. If Robin determines that a $700,000 distribution to its shareholders is appropriate at some point during the year, what is the maximum amount of the distribution that could potentially be treated as a dividend?

• A) $0
• B) $380,000
• C) $480,000
• D) $580,000
• E) None of the above

---

Definitions:

Reserve Requirement

The minimum amount of reserves that a bank must hold against its deposits as mandated by central banking regulations, affecting the bank's capacity to lend.

Excess Reserves

The funds that banks hold over and above the required minimum set by central banking authorities, often seen as an indicator of the banking system's health.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including both cash and digital money.

Treasury Bonds

Long-term government securities issued by the U.S. Department of the Treasury with the purpose of financing federal debt.