Clover Corporation is a calendar year taxpayer. Connie owns all of its stock. Her basis for the stock is $ 10 comma 000. On April 1 of the current (non-leap) year Clover distributes $ 52 comma 000 to Connie.
Determine the tax consequences of the cash distribution in each of the following independent situations:
a.
Current E&P of $ 15 comma 000; accumulated E&P of $ 25 comma 000.
b.
Current E&P of $ 30 comma 000; accumulated E&P deficit of $( 20 comma 000 ).
c.
Current E&P deficit of $( 73 comma 000 ); accumulated E&P of $ 50 comma 000.
d.
Current E&P deficit of $( 20 comma 000 ); accumulated E&P deficit of $( 15 comma 000 ).
Part 1
a. Current earnings and profits (E&P) of $ 15 comma 000; accumulated E&P of $ 25 comma 000. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar. Complete all input fields. For zero amounts, enter a 0. Use parentheses or a minus sign for losses and E&P deficits.)
Situation a.
Distribution ?
Dividend income?
Remaining distribution?
Return of capital?
Capital gain (loss)?
Carryforward accumulated E&P?
