Question

# Duval Corporation is a calendar year taxpayer. Polly owns all of its stock. Her basis for...

Duval Corporation is a calendar year taxpayer. Polly owns all of its stock. Her basis for the stock is \$12,000. On April 1 of the current​ (non-leap) year Duval distributes \$54,000 to Polly.

 a b c d Distribution Dividend income Remaining distribution Return of Capital Capital gain (loss) Carryforward Accumulated E&P

Instructions: Determine the tax consequences of the cash distribution in each of the following independent​ situations:

 a) Current​ E&P of \$25,000​; accumulated​ E&P of \$15,000. b) Current​ E&P of \$25,000​; accumulated​ E&P deficit of \$(34,000). c) Current​ E&P deficit of \$(72,000)​; accumulated​ E&P of \$50,000. d) Current​ E&P deficit of \$(22,000)​; accumulated​ E&P deficit of \$(15,000)

​(Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar. Complete all answer boxes. For zero​ amounts, make sure to enter​ "0" in the appropriate cell. Use parentheses or a minus sign for losses and​E&P deficits.)

 S. no. Current E&P Accumulated E&P Cash Distributed Dividedn Income Return on Capital a. \$25,000.00 \$15,000.00 \$54,000.00 \$54,000.00 \$0.00 b. \$2,500.00 -\$34,000.00 \$54,000.00 \$2,500.00 \$51,500.00 c. -\$72,000.00 \$50,000.00 \$54,000.00 \$50,000.00 \$4,000.00 d. -\$22,000.00 -\$15,000.00 \$54,000.00 \$0.00 \$54,000.00 Note: a. Current Year ( positive E&P), Previous Year (Loss E&P) then Dividend distributed from Current year E&P. b. Current Year ( Loss E&P), Previous Year (Positive E&P ) then Dividend distributed from Previous year E&P b. Current Year ( Positive E&P), Previous Year (Positive E&P ) then Dividend distributed from Previous as well current   year E&P

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