Jayhawk Company reports current E&P of $502,500 and accumulated E&P of negative $350,000. Jayhawk distributed $592,500 to
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Question:
Jayhawk Company reports current E&P of $502,500 and accumulated E&P of negative $350,000. Jayhawk distributed $592,500 to its sole shareholder, Christine Rock, on the last day of the year. Christine's tax basis in her Jayhawk stock is $65,250.
- How much of the $592,500 distribution is treated as a dividend to Christine?
- What is Christine's tax basis in her Jayhawk stock after the distribution?
- What is Jayhawk's balance in accumulated E&P on the first day of the next year?
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