What is the amount and character of income

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Problem - Corporate distributions and ESP - On January 1, Eagle Corporation (a calendar year taxpayer) has accumulated E&P of $200,000. During 2020, the corporation incurs a current E&P de?cit of $420,000. On April 1, Eagle distributes $125,000 to Libby, its sole shareholder, who has a basis in her stock of $112,500.

Required - What is the amount and character of income recognized by Libby and what is Libby's ending stock basis?

Reference no: EM133014315

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