In each of the independent cases below, indicate the taxable portion and return
ID: 2427223 • Letter: I
Question
In each of the independent cases below, indicate the taxable portion and return of capital for each distribution.
Accumulated E&P Beginning of Year
Current E&P
Year-End Cash Distribution
Taxable Amount
Return of Capital
a. $40,000
$20,000
$60,000
b. 40,000
20,000
70,000
c. (40,000)
40,000
30,000
d. (10,000)
(20,000)
15,000
e. 40,000
(15,000)
35,000
Accumulated E&P Beginning of Year
Current E&P
Year-End Cash Distribution
Taxable Amount
Return of Capital
a. $40,000
$20,000
$60,000
b. 40,000
20,000
70,000
c. (40,000)
40,000
30,000
d. (10,000)
(20,000)
15,000
e. 40,000
(15,000)
35,000
Explanation / Answer
Accumulated E&P Beginning of Year
Current E&P
Year-End Cash Distribution
Taxable Amount
Return of Capital
a. $40,000
$20,000
$60,000
$0
$0
b. 40,000
20,000
70,000
$0
-$10,000
c. (40,000)
40,000
30,000
$10,000
-$30,000
d. (10,000)
(20,000)
15,000
$35,000
-$45,000
e. 40,000
(15,000)
35,000
$50,000
-$10,000
Accumulated E&P Beginning of Year
Current E&P
Year-End Cash Distribution
Taxable Amount
Return of Capital
a. $40,000
$20,000
$60,000
$0
$0
b. 40,000
20,000
70,000
$0
-$10,000
c. (40,000)
40,000
30,000
$10,000
-$30,000
d. (10,000)
(20,000)
15,000
$35,000
-$45,000
e. 40,000
(15,000)
35,000
$50,000
-$10,000
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