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Corporation has $20,000 of negative accumulated earnings and profits at the beginning of the year and $30,000 of current positive earnings and profits for the

Corporation has $20,000 of negative accumulated earnings and profits at the beginning of the year and $30,000 of current positive earnings and profits for the current year, before any distribution. At the end of the year, Z distributed $50,000 cash to its sole shareholder, who has a tax basis in the stock of $40,000. How much of the distribution is dividend income to the shareholder?

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