Once invested IN a corporation, shareholders want their money out $-$ they want a return on investment! Mary owns $25\%$ of TAXCORP INC, which paid out a $$50,000$ distribution to her on $12/31/2023.$ All other shareholders got distributions, which totaled up to $$150,000.$ So$,$ a total of $$200,000$ was distributed on that $12/31/2023$ date! The company was started $5$ years ago $-$ lost money every year! Mary was an original shareholder. She had invested $$10,000$ for her stock. TAXCORP INC had a $$500,000$ accumulated DEFICIT at $12/31/2022.$ BUT GOOD TIMES came in $2023-$ and the company had "current earnings and profits" of $$120,000$ for $2023.$ Mary asks $-$ How much of this $$50,000$ distribution will be treated as a dividend?

 

 because combining the Accumulated Deficit of $$(500,000)$ as of $12/31/2022$ with the Current E&P of $$120,000$ results in a Net Accumulated Deficit of $$(380,000)$ before the distribution of the $$200,000$ was made on $12/31/2023.$