On January 1 of the current year, Rhondell Corporation has accumulated E & P of $178,000. Current E & P for the year is $534,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall.

Rhondell makes two distributions to shareholders during the year, as indicated below. Analyze the distributions by completing the table that follows. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital.

Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital.

April 30th distribution of $284800 From Current E&P: $ From Accumulated E&P: Treated as Return of Captial:

December 31st distribution of $498400 From Current E&P: $ From Accumulated E&P: Treated as Return of Captial: