Grant Corporation (C Corp) has two shareholders: Hugh (owns 50%) and Bullocks Corporation (50%). Grant Corporation makes $75,000 cash distribution to each shareholder on December 31, 2019. Hugh is an individual but Bullocks Corporation is a C Corporation. Hughs stock basis is $20,000 and Bullocks stock basis is $40,000. What are the tax consequences to Hugh and Bullocks on the distributions for each of the separate situations?

a. Current E&P is positive $40,000 and Accumulated E&P is negative $15,000.

b. Current E&P is negative $17,000 and Accumulated E&P is positive $27,000