Multiple cash distributions- Positive E&P . Z corporations books reveal the following information at year-end...
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Multiple cash distributions- Positive E&P . Z corporations books reveal the following information at year-end before cash distributions are considered:
Capital stck...............$100,000
Current E&P ............22,000
Accumulated E&P .....32,000
M is a 10% shareholder whose basis for 1,000 shares is $8 per share, or $8,000 total. Compute the tax consequences to Zand M if corporate cash distributions during the year were:
a. $30,000 on December 31.
b. $12,000 for each of the first two quarters and $18,000 for each of the last two quarters.
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