Jack is the only shareholder of XYZ Corporation. At year-end,XYZ had $200 of current year earnings and profits and $600 ofaccumulated earnings and profits. If XYZ distributes cash of $200to Jack, what is Jack’s tax liability on the dividend, if any?Assume Jack has a basis of $10 in XYZ shares. How does this resultchange if XYZ only has $50 of current earnings and profits and $100of accumulated earnings and profits?
Clearly identify the requirements being addressed. Show allcalculations within the cells of an Excel spreadsheet. This meansthat you must use formulas and links so that the thought processcan be examined:
