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What are the tax consequences of the distribution to Lily

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Reference no: EM132673472

Problem - Lily is the sole shareholder of Crimson Corporation (a C corporation). At a time when Crimson has a deficit in accumulated E & P of $90,000 and current E & P of $65,000, it distributes a cash dividend of $85,000. If Lily's basis in her stock is $15,000, what are the tax consequences of the distribution to:

a. Lily?

b. Crimson Corporation?

Reference no: EM132673472

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