Jackson Corporation, a calendar year corporation, has accumulated E&P of $200,000 on Jan. 1, 2019 and current E&P of ($100,000) for the 2022 year. Steve and Rachel are both equal shareholders in Jackson Corporation (50% each). On June 30, 2022, Jackson is planning on making a $150,000 distribution to Rachel. Her basis in the stock is $200,000. She is in the 37% marginal tax bracket for ordinary income. Steve (who is in the 10% marginal tax bracket for ordinary income) is also planning on receiving a $150,000 distribution during the year. Rachel has capital loss carryovers from prior years of $300,000 that are about to expire. Steve basis in his stock is $10,000. Steve plans on receiving his distribution on October 30, 2022.

As a tax advisor for all parties involved, would you suggest this distribution sequence. If not, what distribution sequence would you suggest (in order to minimize the tax liabilities for everyone involved)? Why?