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At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E &...

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Accounting

At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $87,900. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $131,850 to its sole shareholder, Abby, whose stock basis is $26,370. How does the Federal income tax law treat this distribution?

As a result the distribution Abby has the following: Dividend income:_____ $ Return of capital: _____ $ Capital gain:_____ $ Stock basis after the distribution:_____ $

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