ABC Corporation has current E&P of $20,000 and accumulated E&P of $55,000. During the year, ABC distributed a total of $100,000 in dividends. Of this amount, $75,000 will be treated as taxable dividends, and the remaining $25,000 will be treated as a nontaxable return of capital (to the extent of a shareholders stock basis) or as a taxable gain to the shareholders.

From a corporation standpoint, after cash distribution, it will need to reduce current E&P $20,000 and accumulated E&P $55,000. How do corporations deal with the remaining $25,000?