Maria owns 75% and Christopher owns 25% of Cockatoo Corporation, a calendar year taxpayer. Cockatoo makes a $600,000 distribution to Maria on April 1 and a $200,000 distribution to Christopher on May 1. Cockatoo's current E & P is $120,000 and its accumulated E & P is $500,000. What are the tax implications of the distributions to Maria and Christopher? a. How is the current E&P and the accumulated E&P applied to the April I distribution and the May 1 distribution? (5 Points) b. What is the tax treatment of the distribution to (i) Maria and (ii) Christopher? (5 Points) (6) At the beginning of the current year, both Paul and John own 50% of Apple Corporation. In July, Paul sold his stock to Sarah for $110,000. At the beginning of the year, Apple Corporation had accumulated E & P of $200,000 and its current E & P is $250,000 (prior to any distributions). Apple distributed $260,000 on March 1 ($130,000 to Paul and $130,000 to John) and distributed another $260,000 on October 1 ($130,000 to Sarah and $130,000 to John). a. How is the current E&P and the accumulated E&P applied to the March 1 distribution and the October 1 distribution? (5 Points) b. What is the tax treatment of the distribution to Sarah? (5 Points)