1. What is meant by the term earnings and profits?

2. What is the effect on the corporation when it makes a property distribution?

3. Cornflower Corporation distributes equipment (adjusted basis of 70,000 fair market value of $55,000) to its shareholders, Roy. What arethe tax consequences to Cornflower Corporation and to Roy?

4.During the current year, Gnatcatcher, Inc., distributed $200,000 each to Brandi and Yuen in redemption of some of their Gnatcatcher stock. The two shareholders acquired their shares five years ago. Each shareholder is in the 33% tax bracket, and each had a $45,000 basis in her redeemed stock. Brandi incurred $23,250 of tax on her redemption, but Yuen incurred $30,000 on her redemption. Discuss the likely reason for the difference in tax liabilities arising from the stock redemptions.

5. What are some reasons the shareholders of a corporation might want to liquidate the corporation