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How does the federal income tax law treat this distribution

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Question - At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $130,450. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $195,675 to its sole shareholder, Abby, whose stock basis is $39,135. How does the Federal income tax law treat this distribution?

As a result the distribution Abby has the following:

Dividend income: $____________

Return of capital: $___________

Capital gain: $___________

Stock basis after the distribution: $____________

Reference no: EM132934305

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