At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $32,000. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How is the distribution treated for tax purposes?
If an amount is zero, enter "0".
As a result the distribution Abby has the following:
• Dividend Income:
• Return of capital:
• Capital gain:
• Stock basis after the distribution: