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At the beginning of the current year, Green Corporation (a calendar year taxpayer) has accumulated E&P of $75,000. Its current E&P is $45,000.
During the current year, Green distributes $135,000 ($67,500 each) to its equal shareholders, Pam and Chris.
Pam has a basis of $12,000 in her stockand Chris has a basis of $3,000 in his stock.
What are the tax consequences of the $135,000 distribution for Pam and Chris? To Green Corporation?
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