R Corporation has a negative current earnings and profits for tax year 20X7 of $15,000. Accumulated earnings and profits as of the beginning of 20X7 equal $10,000. On June 1, 20X7, R Corporation distributes $6,000 cash to its sole shareholder Y, whose basis in the stock is $2,000. What is the amount of dividend income that Y must report for the year (if zero, write zero as the answer)? Do any allocations on a per-month basis instead of a per-day basis.
R Corporation has a negative current earnings and profits for tax year 20X7 of $15,000. Accumulated earnings and profits as of the beginning of 20X7 equal $10,000. On June 1, 20X7, R Corporation distributes $6,000 cash to its sole shareholder Y, whose basis in the stock is $2,000. What is the amount of dividend income that Y must report for the year (if zero, write zero as the answer)? Do any allocations on a per-month basis instead of a per-day basis.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 49P
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R Corporation has a negative current earnings and profits for tax year 20X7 of $15,000.
On June 1, 20X7, R Corporation distributes $6,000 cash to its sole
shareholder Y, whose basis in the stock is $2,000.
What is the amount of dividend income that Y must report for the year (if zero, write zero as the answer)?
Do any allocations on a per-month basis instead of a per-day basis.
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