Bob owns 100% of the stock of XYZ corporation. Bob’s tax basis in XYZ corporation as of January 1, 2015 is $100,000. As of December 31, 2014 XYZ had accumulated E&P of $150,000. During 2015, XYZ earns current E&P of $300,000. On July 1, 2015, XYZ makes a distribution of $100,000 to Bob. •

How is the distribution characterized (i.e. how much is a dividend, how much is a return of capital, how much is a capital gain)? •