On January 2, Chaz transfers cash of $143,400 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $35,850. The income is credited to its earnings and profits account. The corporation distributes $10,755 to Chaz. If an amount is zero, enter "o". a. How do Chaz and the corporation treat the $10,755 distribution? Chaz has a taxable dividend of $ 10,755 and the corporation has a deduction of $ o . b. Assume instead that Chaz transfers to the corporation cash of $71,700 for stock and cash of $71,700 for a note of the same amount. The note is payable in equal annual installments of $7,170 and bears interest at the rate of 6%. No distributions are made during the year to Chaz. However, at the end of the year, the corporation pays an amount to meet the loan obligation(i.e., the annual $7,170 principal payment plus the interest due). Determine the total amount of the payment and its tax treatment to Chaz and the corporation. The corporate payment to Chaz totals $ 71,700 x . Chaz has interest of $ 4,302 and a note repayment of $ 7,170 of which $ 4,302 is taxable to Chaz. The corporation has a deduction of $ 4,302