Explore BrainMass

Explore BrainMass

    Tax Treatment of Distributions

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    MikeCO made the following distributions during the year:
    *5/1/x1 $60,000
    *9/1/x1 40,000

    Determined the tax treatment of each distribution under each of the following independent circumstances:

    Accum E&P Curr E&P
    a)$10,000 $50,000
    b)(70,000) 50,000
    c) 95,000 (18,250)

    © BrainMass Inc. brainmass.com November 30, 2021, 3:24 am ad1c9bdddf

    Solution Preview

    Circumstance A
    *5/1/x1 $60,000 - tax as dividends
    *9/1/x1 40,000 - return of capital, hence non taxable. However, if it has a capital gains component then it will be taxed depending on whether the capital gains are short or long ...

    Solution Summary

    This solution provides calculations and and justifications on the tax treatment of each distribution circumstance.