Brent, Matt, Chris, Brad, and Anwer are five unrelated shareholders who each owns 20 of the 100 outstanding shares of Aggie Corporation. On June 30 of this year, Aggie distributed $100,000 in cash to the shareholders. On September 30 of this year, Aggie redeemed all of Anwers shares for $80,000. Aggie had $45,000 of accumulated E&P at the beginning of the year and reported $120,000 of current E&P at year-end. What is Aggies accumulated E&P at the beginning of next year? Consult Rev. Rul. 74-338. (Hint: Determine the tax status of the redemption and then calculate the effect of the June distribution on current E&P.)

current E&P

Less dividends paid

Undistributed current E&P

Prorated undistributed current E&P at 9/30.

add accumulated E&P at beg yr

total accumu;lated E&P at 9/30

reduced accmulated E&P

add current E&P in 4th qrt

Accum E&P beg next yr

Research Project Saved Help Save & Exit Submit Check my work 1 Brent, Matt, Chris, Brad, and Anwer are five unrelated shareholders who each owns 20 of the 100 outstanding shares of Aggie Corporation. On June 30 of this year, Aggie distributed $100,000 in cash to the shareholders. On September 30 of this year, Aggie redeemed all of Anwer's shares for $80,000. Aggie had $45,000 of accumulated E&P at the beginning of the year and reported $120,000 of current E&P at year-end. What is Aggie's accumulated E&P at the beginning of next year? Consult Rev. Rul. 74-338. (Hint: Determine the tax status of the redemption and then calculate the effect of the June distribution on current E&P.) (Negative amount should be indicated with a minus sign.) 50 points Skipped Current E&P eBook $ Print Less dividends paid Undistributed Current E&P Prorated Undistributed Current E&P at 9/30 Add Accumulated E&P at the beginning of year Total Accumulated E&P at 9/30 Reduce Accumulated E&P by Add current E&P in 4th quarter Accumulated E&P at beginning of next year References $