Indicate how the distributions would be treated

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W Corporation was owned by shareholder C prior to a sale of all of his stock (basis at the beginning of the year, $5,000) to D in June for $10,000. During the year, W Corporation distributed $60,000 on May 1 and $40,000 on September 1. Indicate how the distributions would be treated by individual shareholders C and D in the following situations:


Accumulated E&P Current E&P
a. $10,000 $50,000
b. (70,000) $50,000
c. $95,000 (18,250)

Reference no: EM13519981

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