Unformatted text preview: rrent E&P of $20,000, the total amount of distributions classified as dividends is $50,000.
Choice "a" is incorrect. If a corporation has accumulated E&P or current year E&P, the distribution
(depending upon amount) would be taxable as a dividend.
Choice "b" is incorrect. The amount taxable as a dividend is total E&P, not the difference between one
distribution and current E&P.
Choice "d" is incorrect. The total distributions exceeds E&P. The excess will be treated as a return of
basis and any remaining excess will be capital gain. CPA-02024 Type1 M/C A-D Corr Ans: B PM#11 R 3-01 10. CPA-02024 ARE R97 #5 (Adapted) Page 19
How are a C corporation's net capital losses used?
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Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 a.
d. Deducted from the corporation's ordinary income only to the extent of $3,000.
Carried back three years and forward five years.
Deductible in full from t...
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