If a corporation makes a pro-rata cash distribution that exceeds both current and accumulated E&P...
90.2K
Verified Solution
Link Copied!
Question
Accounting
If a corporation makes a pro-rata cash distribution that exceeds both current and accumulated E&P and the distribution is NOT associated with a stock redemption, how will the distribution be treated for tax purposes once the distributed amounts exceed current and accumulated E&P?
a. First treated as ordinary income and then as capital income.
b. First taxed at 15% for capital gains and then taxed at ordinary income rates.
c. First treated as a return on capital, then as capital gains.
d. None of the above.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
