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

question 97

Essay

Austin Company reports positive current E&P of $200,000 and negative accumulated E&P of $300,000. Austin distributed $250,000 to its sole shareholder, Betsy Bevo, on December 31, 20X3. Betsy' tax basis in her stock is $125,000. How much of the $250,000 distribution is treated as a dividend to Betsy and what is her tax basis in Austin stock after the distribution?

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Definitions:

Programmability

The ability to program or schedule operations, often relevant in contexts such as digital platforms where content can be orchestrated.

Popularity

Popularity refers to the state or condition of being liked, admired, or supported by a large number of people.

Connectivity

The state or extent of being connected or interconnected, especially referring to computers, networks, or communication systems.

Particular Platform

A specific digital or physical space designed for the delivery and exchange of media, information, or services.