ABC Corp. has two classes of stock issued and outstanding

• common stock, and
• nonvoting preferred stock.

Both the common and the preferred stock are traded on the New York Stock Exchange. (The exact number of shares of either class is not relevant to the present issue.)

ABCs board of directors authorized the payment of the following cash dividends during 2022:

Common Stock

January 2 $10M

April 1 $5M

July 1 $5M

October 1 $25M

Preferred Stock

March 15 $15M

July 1 $16M

September 15 $18M

October 1 $20M

ABC had accumulated E&P of $50M as of January 1, 2022.

On or about August 31, 2022, ABC realized an ordinary loss of approximately $100M, This loss was also recognized on the calendar year-end 2022 tax return.

ABC is a calendar-year corporation.

As a result of recognizing this loss, ABC experienced a deficit in the current (2020) E&P of $80M.

Issue

How much or which, if any, of ABCs 2022 dividends should have been reported to shareholders as ordinary dividends (Form 1099-DIV, Box 1a), and how much or which, if any, should have been reported to shareholders as Nondividend distributions (Form 1099-DIV, Box 3)? Explain your analysis and support your conclusions.