What do you view E&P as? I.E., what is its purpose under the Code and does it really matter anymore considering dividends are taxed at Capital Gains rates? Based upon the logic of the E&P question does the idea of partial liquidation really make sense in regards to whether something is a capital gain or a dividend?
It is DIVIDEND.
Earnings and profits (E&P) is the measure of corporations economic ability to pay dividends to its shareholders.An up-to date E&P calculation is important for many corporate transactions, including determining whether a distribution to shareholders is a Taxable Dividend.
Calculating E&P after the fact can require advisers to go back many years to examine all of the corporations records, some times taking into accounts the financial transaction and tax return information for the corporation since its inception.
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