Bob and Paul each own half of the 100 outstanding shares of BP Corporation. This year BP reported taxable income of $6,000 and was subject to a 25 percent tax rate. In addition, BP received $20,000 of life insurance proceeds due to the death of an employee (BP paid $500 in life insurance premiums this year). BP had $5,000 of accumulated E&P at the beginning of the year.

a. What is BPs current E&P? (Show your work with detailed descriptions)

b. BP distributed $6,000 on February 15 and $30,000 on August 1. What total amount of dividends will Bob and Paul report? (Show your work with detailed descriptions)

c. What amount of capital gain (if any) would Bob and Paul report on the distributions in part b if their stock basis is $2,000 and $10,000, respectively? (Please not only give me numbers but use words here to describe what is happening. Tell me how you got to your answer.)

d. What form would BP use to report non-dividend distributions?

e. On what form (line) would Bob and Paul report these distributions? (Be specific. In addition to what line its reported on, where does it flow from there? Does it flow to another form on the return? What part of that other form?)