This year, Sooner Company reports current E&P of negative $426,000. Its accumulated E&P at the beginning of the year was $264,000. Sooner distributed $528,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomers tax basis in his Sooner stock is $124,500.

a.How much of the $528,000 distribution is treated as a dividend to Boomer?

b.What is Boomers tax basis in his Sooner stock after the distribution?

c.What is Sooners balance in accumulated E&P on the first day of next year?