Thriller Corporation has one- class of voting common stock, of which 1,000 shares are issued and outstanding.The shares are owned as follows:

Joe Jackson400

Mike Jackson (Joe's son)200

Jane Jackson (Joe's daughter)200

Vinnie Price (unrelated)200

Total1,000

Thriller Corporation has current E&P of $400,000 for this year and accumulated E&P at January 1 of this year of $60,000.

During this year, the corporation made the following distributions to its shareholders:

03/31: Distributed $100/share to each shareholder ($100,000 in total).

06/30: Distributed $100/share to each shareholder ($100,000 in total).

09/30: Distributed $100/share to each shareholder ($100,000 in total).

12/31: Redeemed all of Vinnie's shares for $250,000 in cash.

a.Determine the tax status of each distribution made this year.

Treatment

1)

Distribution om 03/31

2) Joe Distribution on 06/30

3) Vinnie Distribution on 09/30

4) Distribution on 12/31

b.Compute the corporation's accumulated E&P at January 1 of next year.