Question
AAA at the beginning of the year was $15,000 for Carver Corporations. During the year, Carver had the following: Ordinary Income $31,000 Tax Exempt Income
AAA at the beginning of the year was $15,000 for Carver Corporations. During the year, Carver had the following:
Ordinary Income $31,000
Tax Exempt Income $3,000
Capital Loss $5,000
Fines and Penalties $4,000
Carver also had Accumulated E&P of $10,000. Finally, Carver made $45,000 cash distributions during the year. What are the tax consequences of the cash distribution?
a. All $45,000 is taxed as a dividend distribution
b. $40,000 is taxed as a dividend distribution
c. $5,000 is treated as a dividend distribution, the other $40,000 is not taxed
d. None of the above
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