Question
An earnings and profits (E&P) study for Hardy Corp., a calendar year C corporation was performed. The results of the study indicated that Hardy had
An earnings and profits (E&P) study for Hardy Corp., a calendar year C corporation was performed. The results of the study indicated that Hardy had accumulated E&P of $50,000 as of January 1st, 2019, and current E&P of $450,000 for 2019. Hardy made a cash distribution to its three shareholders on December 31, 2019 of $750,000. The distribution was pro-rata (according to ownership percentage).
Steve owned 50% of Hardy on December 31st, Laura owned 30% and Harry owned 20%. In addition, Steves basis in his Hardy stock as of December 31st was $100,000, Lauras basis was $50,000 and Harrys basis was $25,000.
For each of the items below, enter the requested amount for each shareholder. Enter all amounts as positive, whole values. If a response is zero, enter a zero (0).
Steve | Laura | Harry | ||
1 | Dividend income from current E&P | |||
2 | Dividend income from accumulated E&P | |||
3 | Nontaxable return of capital | |||
4 | Capital gain income |
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