Husker Corporation Reports Current E&P of Negative $200,000 in 20X3

question 98

Multiple Choice

Husker Corporation reports current E&P of negative $200,000 in 20X3 and accumulated E&P at the beginning of the year of $300,000. Husker distributed $200,000 to its sole shareholder on December 31, 20X3. The shareholder's tax basis in her stock in Husker is $50,000. How is the distribution treated by the shareholder in 20X3?

• A) $200,000 dividend.
• B) $100,000 dividend, $50,000 tax-free return of basis, and $50,000 capital gain.
• C) $100,000 dividend and $100,000 tax-free return of basis.
• D) $0 dividend, $50,000 tax-free return of basis, and $150,000 capital gain.

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry and improvements to human life.

Environmental Worldview

An individual's or society's beliefs about the importance of the environment, influencing how they interact with and manage natural resources.

Ecofeminists

Activists and scholars who combine ecological concerns with feminist perspectives, emphasizing the connection between the exploitation of nature and the oppression of women.

Oppression

The exercise of authority or power in a burdensome, cruel, or unjust manner.