Determine the tax concequneces of the cash distribution

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Question

Betacourt is a calendar year tax payer. All of the stock is owned by Austen. Her basis for the stock is 35,000. On March 1 (of a non leap year) Betacourt disrtibutes 120,000 to Austen. Determine the tax concequneces of the cash distribution to austen in each of the following independenat situations ( dividend, return on capial, capital gain, impact on stock basis) explain.

Current E&P Accumulated E& P

30,000 80,000

70000 (50,000)

(100,000) 40,000

(20,000) (50,000)

Reference no: EM132385718

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