On January 1, Eagle Corporation (A Calendar Year Taxpayer) Has

question 162

Multiple Choice

On January 1, Eagle Corporation (a calendar year taxpayer) has accumulated E & P of $300,000. During the year, Eagle incurs a net loss of $420,000 from operations that accrues ratably. On June 30, Eagle distributes $180,000 to Libby, its sole shareholder, who has a basis in her stock of $112,500. How much of the $180,000 is a dividend to Libby?

• A) $0
• B) $90,000
• C) $112,500
• D) $180,000
• E) None of the above

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Definitions:

Cost Curves

Graphs that show the cost of producing different quantities of a good or service, typically including average and marginal cost curves.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Total Cost

The total cost is the sum of fixed and variable costs incurred in the production of goods or services.

Economic Profit

The difference between total revenue and the total costs of inputs, including both explicit and implicit costs.