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# E & P deficit

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Atlantic Corporation, a calendar-year taxpayer, has \$120,000 of accumulated E & P deficit as of January 1. Atlantic's current E & P is \$40,000. The corporation makes a \$50,000 distribution to its shareholders. (Shareholders have stock basis of \$60,000.. How is the \$50,000 distribution to the shareholders characterized by the shareholders? What is the amount of Atlantic's E & P deficit at the end of the year?

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How is the \$50,000 distribution to the shareholders characterized by the shareholders?

The \$50,000 distribution is characterized as a ...

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The solution answers how is the \$50,000 distribution to the shareholders characterized by the shareholders, and what is the amount of Atlantic's E & P deficit at the end of the year.

\$2.19