What are tax consequences to shareholder

Reference no: EM133354145

Question: JJB Corporation, an accrual basis taxpayer, has struggled to survive since its formation, six years ago. As a result, it has a deficit in accumulated E & P at the beginning of the year of $100,000. This year, however, corporation earned a significant profit; taxable income was $300,000. And E& P for current year is 225,000. Consequently, JJB made one distribution ( at year end) to Jeff, its sole shareholder: $350,000. What are tax consequences to shareholder and to the corporation?

Reference no: EM133354145

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