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Elk Company Reports Negative Current E&P of $200,000 and Positive

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Elk Company reports negative current E&P of $200,000 and positive accumulated E&P of $300,000.Elk distributed $200,000 to its sole shareholder,Barney Rubble,on December 31,year 1.Barney's tax basis in his Elk stock is $75,000.What is the tax treatment of the distribution to Barney and what is his tax basis in Elk stock after the distribution?


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