How much of the distribution is treated as a dividend

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Problem - AndyCo acquires DrewCo in a merger, becoming AndrewCo. AndyCo has $1,000,000 in positive accumulated E & P before the merger, and DrewCo has negative accumulated E & P of $400,000 before the merger.

AndrewCo wants to make a distribution to its shareholders after the end of its first year. How much of the distribution is treated as a dividend if AndrewCo expects to have minimal negative current E & P at the end of its first year?

Reference no: EM132646874

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