Question
Johnson Company reports positive current E&P of $250,000 and negative accumulated E&P of $325,000. Johnson distributed $280,000 to its sole shareholder, Betsy Bevo, on December
Johnson Company reports positive current E&P of $250,000 and negative accumulated E&P of $325,000. Johnson distributed $280,000 to its sole shareholder, Betsy Bevo, on December 31, 2014. Betsy's tax basis in her stock is $150,000.
(a) Describe the income tax treatment of this distribution to the shareholder.
(b) What is the shareholder's basis in the stock after the distribution?
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Deciding What To Teach And Test Developing Aligning And Auditing The Curriculum
Authors: Fenwick W. English
1st Edition
0803968329, 978-0803968325
