CT6-Opt1 -1 Question: Determine the tax treatment of each distribution above as either a dividend distribution, an exchange, or return of capital. Explain the tax rule that justifies and supports the determination made for each distribution. What is Thunder Inc.'s accumulated E&P at December 31,2018 Scenario: Thunder Incorporated has issued 2000 shares of one class of common stocks. These shares are outstanding throughout 2018 and are owned as follows: Isaac Newton-800 shares, Ben Newton (son of Isaac)-400 shares, Mary Newton (daughter of Isaac)-400 shares, Sam Melvin-400 shares, for a total of 2000 shares. Thunder Incorporated's reported current Earnings and Profit of $600,000 in 2018, and accumulated Earnings and Profits of $1,000,000 at the beginning of 2018. The corporation made the following distributions to its shareholders: 03/31/2018: It distributed $20/share to each shareholder or $40,000 in total ($20 x 2000). 06/30/2018: It bought back 400 shares of Isaac's stock for $400,000 with a corresponding basis at the time of $200,000. 09/30/2018: Redeemed 120 shares of Sam's stock for $120,000 with a basis of $72,000 for all 120 shares. 12/21/2018: It distributed $20/share to each shareholder for a total of ($29,600 in total)