Question

may inc owned entirely by ruth may has balances aaa 80,000 e&P 70,000 ruth basis in...

may inc owned entirely by ruth may has balances

aaa 80,000

e&P 70,000

ruth basis in may inc. 140,000

if may inc distributed 240,00 to ruth what is amount of dividend

160,000

30,000

70,000

90,000

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Answer #1

The dividend is the amount which is paid in excess.

Dividend = Distributed amount + Earnings and profits – (Assets + Basis)

                = 240,000 + 70,000 – (80,000 + 140,000)

                = 310,000 – 220,000

                = $90,000

Answer: 4th option

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