What rate will the dividend be taxed

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Reference no: EM13304266

It's a tax problem. john smith (age 65) is single and earns 40000$ per year as a bank examiner. He has no itemized deductions and no dependents. He also owns stock in ABC corporation and he received a 10,000 distribution from ABC during the year. Current earnings and profits ( E&P) accumulated E&P and his basis in the shares equal $3000, $4000 and $5,000, respectively! How much of the 10,000 is taxed as dividend income? Assuming the dividend is a "qualifying dividend", what rate will the dividend be taxed? Assuming the dividend is not a "qualifying dividend", at what rate will the dividend be taxed?

Reference no: EM13304266

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