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Jack is the only shareholder of XYZ Corporation. At year-end, XYZ had $200 of current year...

Jack is the only shareholder of XYZ Corporation. At year-end, XYZ had $200 of current year earnings and profits and $600 of accumulated earnings and profits. If XYZ distributes cash of $200 to Jack, what is Jack’s tax liability on the dividend, if any? Assume Jack has a basis of $10 in XYZ shares. How does this result change if XYZ only has $50 of current earnings and profits and $100 of accumulated earnings and profits?

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Answer is highlighted in yellow: Solution: Income from other sources is not given, upto gross income of $39,375, dividend tax

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