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Champ received a $51,600 distribution from NeatCo, a U.S. C corporation. NeatCo’s earnings and profits for...

Champ received a $51,600 distribution from NeatCo, a U.S. C corporation. NeatCo’s earnings and profits for the year totaled $30,960.

How much dividend income does Champ recognize?

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Answer #1

Dividend income recognized by Champ = $30960

A dividend to the extent of the corporation’s earnings and profits should be recognized.

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