Multiple Choice Question
Davis Corp. operated as a C corporation until the start of this year when it elected S corporation status. At the time of the S election, Davis had $3,000 of E&P.
During the year, Davis recognized $25,000 of ordinary business income, had $2,500 of dividend income and $1,500 of long-term capital loss. Assume Davis makes a distribution of $30,000. What is the Davis' E&P at year-end?
O $3,000
O ($1,000)
O $0