Question

Check my w Required information [The following information applies to the questions displayed below.] Part 1 of 3 10 This year, Sooner Company reports a deficit in current E&P of ($468,000). Its accumulated E&P at the beginning of the year was $330,000. Sooner distributed $660,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomer's tax basis in his Sooner stock is $106,000. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) points eBook a. How much of the $660,000 distribution is treated as a dividend to Boomer? Print References Dividend

Answer 1

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660 000 distribution is tycoted 7. as a How much of the dividend to Boomer 2 yuivernant R : Answer Boomer reports a dividend of & 96000 He first computes balance in Eup as of June 30 by allocating the deficit in corrent Eup pro rata over the year. The deficit in current Eup of June 30 is ($234000) [($ 468000)46]. ence accomolated Eup as of June 30 is $96000 [re. $ 330000 - $234000] in his Sooner Stock nr 6: What after is the Boomer's tax basis distribution ? Reperirenment 6 : Answer: Boomer's tax basis in his Sooner Stock is $0, which is beginning tax bosts of $106000 less the Lesser of the distribution in excess of accumulated E cup ($564000) (or) his basis in the sooner Stock ($ 106000). The remaining & 426000 [ie. $660000 - $234000] is treated as gain from of the sooner Stocil (capital gain). sale Requirement @ to what is Sooner's balance in accomolated Epp on the first day of next year ? Sooner's balance in accomulated sypis & (234000) compted as follows: Alconulated Eup, beginning of this year $330000 Current E &P $(468000) Dividend paid (96000) Alcorolated Eup, end of the year $(234000) The deficit asose after equals the the defint in current typ that dividend payment [c1 468000 346112]