Share
Explore BrainMass

Nonliquidating Distribution

1.Deficit in accumulated E&P is $(20,000)
Current E&P is $15,000
On 12/31/x1, the Corp distributed $50,000 to its sole SH
How much is considered to be dividend?

2. Accumulated E&P is $15,000
Deficit in current E&P $(20,000)
On 12/31/x1, the Corp distributed $50,000 to its sole SH
How much is considered to be dividend?

3. Accumulated E&P is $15,000
Deficit in current E&P $(20,000)
On 12/31/x1, the Corp distributed $50,000 to its sole SH
A current deficit is treated as happening evenly throughout the year, about when would the AE&P run out?
Is there any E&P left on 12/31?

4. Accumulated E&P is $15,000
Deficit in current E&P $(20,000)
What if the distribution date changes to 6/30?

Solution Preview

Case 1
$15,000 is considered to be the dividend which is equal to the current E&P

Case 2
No portion of the distribution is considered dividend because the ...

Solution Summary

This solution provides an analysis of each case and comments on the dividends, distribution, accumulated E&P and changes in dividends.

$2.19