18. Jagdon Corp.'s book income was S150,000 for the current yea S r, including interest income from Municipal bonds of S5,000 and excess capital losses over capital gains of S10,000. Federal income tax expense of $50,000 was also included in Jagdon's books. What amount represents Jagdon's taxable income for the current year? A) S185,000 B) S195,000 C) S205,000 D) $215,000 19. Which of the following statements best describes the priority of the tax treatment of a distribution from a corporation to a shareholder? A) The shareholder can elect to treat the distribution as either a dividend to the extent of the corporation's earnings and profits or a return of capital, followed by gain B) The distribution is a return of capital, then gain from sale of stock, and finally a C) The distribution is a return of capital, then a dividend to the extent of the D) The distribution is a dividend to the extent of the corporation's earnings and from sale of stock. dividend to the extent of the corporation's earnings and profits. corporation's earnings and profits, and finally gain from sale of stock profits, then a return of capital, and finally gain from sale of stock. 20. Which of the following statements best describes the role of current and accumulated earnings and profits in determining if a distribution is a dividend? A) At a minimum, some portion of the distribution will be a dividend if current earnings and profits for the year are positive, even if accumulated earnings and B) A distribution will never be a dividend if current earnings and profits for the year C) A distribution will only be a dividend if total earnings and profits (current plus D) A distribution can never be a dividend if current eanings and profits are negative profits are negative. are negative, even if accumulated earnings and profits is positive. accumulated) is positive at the time of the distribution