Maria Owns 75% and Christopher Owns 25% of Cockatoo Corporation

question 89

Essay

Maria owns 75% and Christopher owns 25% of Cockatoo Corporation, a calendar year taxpayer. Cockatoo makes a
$600,000 distribution to Maria on April 1 and a $200,000 distribution to Christopher on May 1. Cockatoo's current
E & P is $120,000 and its accumulated E & P is $500,000. What are the tax implications of the distributions to Maria and Christopher?

---

Definitions:

Diggers

A group of radical English Protestant agrarians who, in the 17th century, advocated for communal land ownership and the redistribution of land.

Political Unrest

Refers to a period of public dissatisfaction or protest against governments or political systems, often leading to instability.

English Civil War

A series of armed conflicts and political machinations between Parliamentarians and Royalists from 1642 to 1651 in England, concerning governance and authority issues.