Anne and Paul are shareholders of Android Corporation. Each has a stock basis of $10,000. Android has $12,000 of current E&P and $5,000 of accumulated E&P. Android distributes $3,000 to Anne on July 31 and to Paul $33,000 On December 1. What are the tax consequences of the distribution?

(a) What is Ann’s dividend income (if any)?

(b) What is Ann’s capital gain? (if any)?

(c) What is Paul’s dividend income (if any)?

(d) What is Paul’s capital gain (if any)?

Answer rating: 100% (QA)

aAnnes Dividend income 3000 b Annes capital gain Nil Explanation When amount was paid s... View the full answer