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Choice b is incorrect the amount taxable as a

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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? 5 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 a. b. c. 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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