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How is each shareholder taxed on the distribution

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Reference no: EM132070468

Question - Burlington Corporation and Susan each own half of Essex, Inc. At the beginning of the year Essex has a deficit in accumulated E&P of $350,000. Its current E&P is $90,000. During the year, Essex distributes $40,000 each to Burlington Corp and Susan.

a. How is each shareholder taxed on the distribution?

b. What is Burlington Corporations taxable income at the end of the year?

Reference no: EM132070468

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