Umbrella Corporation has current E&P of $100,000 and a deficit in accumulated E&P of ($200,000). A $50,000 distribution from Umbrella to its sole shareholder at year-end will not be treated as a dividend because total E&P is a deficit ($100,000).

T/F

Note: the answer key states that it will be treated as a dividend but does not explain why. Can you please explain why the distribution will be treated as a dividend. In addition, please provide a response within 48 hours). I would greatly appreciate it.