This year Sooner Company reports current E&P of negative $300,000. Its accumulated E&P at the beginning of

Question:

This year Sooner Company reports current E&P of negative $300,000. Its accumulated E&P at the beginning of the year was $200,000. Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomer's tax basis in his Sooner stock is $75,000.
a. How much of the $400,000 is treated as a to Boomer?
b. What is Boomer's tax basis in his Sooner stock after the What is Sooner's balance in accumulated E&P on the first day of next year?
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