Question
Hawkeye Company reports current E&P of $300,000 this year and accumulated E&P at the beginning of the year of $200,000. Hawkeye distributed $400,000 to its
| Hawkeye Company reports current E&P of $300,000 this year and accumulated E&P at the beginning of the year of $200,000. Hawkeye distributed $400,000 to its sole shareholder, Ray Kinsella, on December 31 of this year. Rays tax basis in his Hawkeye stock is $75,000. |
| a. | How much of the $400,000 distribution is treated as a dividend to Ray? |
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| b. | What is Rays tax basis in his Hawkeye stock after the distribution? |
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Computer Accounting
Authors: Donna Kay
14th Edition
007762453X, 9780077624538
