Determine the portion of each of the following distributions that should be reco

ID: 2445827 • Letter: D

Question

Determine the portion of each of the following distributions that should be recorded as either dividend income or return of capital.

a. Accumulated E&P at the beginning of the year ($300,000)

Current E&P 100,000

Cash Distribution on 12/31/2014 150,000

b. Accumulated E&P at the beginning of the year $200,000

Current E&P (100,000)

Cash Distribution on 12/31/2014 250,000

c. Accumulated E&P at the beginning of the year $ 80,000

Current E&P 70,000

Cash Distribution on 12/31/2014 140,000

d. Accumulated E&P at the beginning of the year $ 150,000

Current E&P (70,000)

Cash Distribution on 6/30/2014 100,000

a) A E & P is ($ 300000) & C E & P is $100000. cash distribution is $150000. dividend income is $100000

b) A E & P is $200000 & C E & P ($ 100000). cash distribution is $250000. dividend income is $200000

c) A E & P is $80000 & C E & P $70000. cash distribution is $140000. dividend income is $140000.

d) A E & P is $150000 & C E &P ($70000). cash distribution is $10000. dividend income $100000.

if current year has positive E & P but previous year loss then dividend income distributed from current year.

if current year has loss E & P but previous year gain then dividend income distributed from previous year.

if bothe has gain then dividend distributedfrom both income.

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