A corporation had $10,000, of earnings and profits (E&P) for the current year and accumulated negative E&P of $100,000. It paid a cash distribution of $30,000. What amount represents the taxable dividend to the shareholder for that year?

a. $100,000

b. $30,000

c. $10,000

d.$0

Question

Business

Bobbie

31 May, 18:27

A corporation had $10,000, of earnings and profits (E&P) for the current year and accumulated negative E&P of $100,000. It paid a cash distribution of $30,000. What amount represents the taxable dividend to the shareholder for that year?

a. $100,000

b. $30,000

c. $10,000

d.$0

+4

Answers (1)

Know the Answer?

Lennon Chen · Answer 1

c. $10,000.

Explanation:

The profit of the company is $10,000 which is taxable dividend income. The company's E&P accumulate is negative. Dividends are paid out from current or accumulated earning and profits of the company. The company had only $10,000 earnings in the current earning and profits account which will be taxable dividend income.

A corporation had $10,000, of earnings and profits (E&P) for the current year and accumulated negative E&P of $100,000. It paid a cash distribution of $30,000. What amount represents the taxable dividend to the shareholder for that year?a. $100,000b. $30,000c. $10,000d.$0

A corporation had $10,000, of earnings and profits (E&P) for the current year and accumulated negative E&P of $100,000. It paid a cash distribution of $30,000. What amount represents the taxable dividend to the shareholder for that year?

a. $100,000

b. $30,000

c. $10,000

d.$0