Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued...
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Accounting
Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows:
| Joe Jackson | 400 |
| Mike Jackson (Joes son) | 200 |
| Jane Jackson (Joes daughter) | 200 |
| Vinnie Price (unrelated) | 200 |
| Total shares | 1,000 |
|
| |
Thriller Corporation has current E&P of $400,000 for this year and accumulated E&P at January 1 of this year of $60,000. During this year, the corporation made the following distributions to its shareholders:
03/31: Distributed $100 per share to each shareholder ($100,000 in total).
06/30: Distributed $100 per share to each shareholder ($100,000 in total).
09/30: Distributed $100 per share to each shareholder ($100,000 in total).
12/31: Redeemed all of Vinnies shares for $250,000 in cash.
a. Determine the tax status of each distribution made this year.
b. Compute the corporations accumulated E&P at January 1 of next year. (Do not round intermediate calculations.)
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