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12. Robin Corporation, a calendar year taxpayer, has a deficit in current E & P of $200,000 and a $580,000 positive balance i

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Answer #1

12:-

a= If the dividend is distributed at the start of the year, then the accumulated E&P have a positive balance of $580000 and the entire amount of $580000 can be distributed as dividend. If the dividend is paid at any time during the year, then the balance in accumulated E&P is set off by the deficit in the current year.

Therefore , the maximum amount of the distribution that can be treated as a dividend is $580000.

b= A distribution made on Dec.31 would be a amount of $380000 dividend.

(Accumulated E&P - deficit in current E&P)

($580000 - $200000) = $380000

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