Ridge, Inc., reports the following income for the current year.

Operations	$92,000
Tax-exempt interest income	19,000
Long-term capital gain	60,000

Ridge holds earnings and profits (AAA for an S corporation) of $900,000 at the beginning of the year. A distribution of $200,000 is made to the owners.

A.

Determine the income for each entity type below:

(1) If Ridge is a C corporation then the taxable income is $______.

(2) If Ridge is an S-corporation then the ordinary income of the corporation is $______ and the separately stated taxable items are $______

B.

Determine the effect of the distribution on the shareholders for Ridge. Assume shareholder have sufficient stock basis.

(1) C corporation: Because the corporation has ending E & P of $______, the shareholders have a capital gain dividend income return of capital dividend income of $200,000.