How much of wendy distribution will be taxed as a dividend

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Question - Wendy and David, equal shareholders in Loon Corporation, receive $300,000 each in distributions on December 31 of the current year. Loon's current year E & P is $500,000 and it has no accumulated E & P. Last year, Loon sold an appreciated asset for $600,000 (basis of $200,000). Payment for one half of the sale of the asset was made this year. How much of Wendy's distribution will be taxed as a dividend?

a. $0.

b. $150,000.

c. $250,000.

d. $300,000.

e. None of the above.

Reference no: EM131786431

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