Make up your own amounts and answer your own question using the following information.

Bob owns 100% of the stock of XYZ corporation. Bobs tax basis in XYZ corporation as of January 1, 2015 is _______. As of December 31, 2014 XYZ had accumulated E&P of _______. During 2015, XYZ earns current E&P of ________. On _____ 2015, XYZ makes a distribution of _______ to Bob.

a. How is the distribution characterized (i.e. how much is a dividend, how much is a return of capital, how much is a capital gain)? b. What is Bobs tax basis in XYZ corporation after the distribution?