2. Famco is a corporation owned by four family members. They have been advised to avoid dividend distributions because a dividend results in two levels of tax. If the four owners need cash flow from the corporation, but will not pay a dividend, list three ways to get $$ out without creating two levels of tax (9 points):

a. __________________________________

b. __________________________________

c. __________________________________

3. Complete the following with respect to dividends and distributions (4 points):

All _____________________are first _____________________ but not all ___________________ are ____________________________.