Comprehensive Problem $14-74($LO $14-1,$ LO $14-2,$ LO $14-3,$ LO $14-4,$ LO $14-5)($Statlc$)$

Thriller Corporation has one class of voting common stock, of which $1,000$ shares are issued and outstanding. The shares are owned

as follows:

Thriller Corporation has current E&P of $$300,000$ for this year and accumulated E&P at January $1$ of this year of $$500,000.$

During this year, the corporation made the following distributions to its shareholders:

$03/31$: Pald a distribution of $$10$ per share to each shareholder $($ $$10,000$ in total$).$

$06/30$: Redeemed $200$ shares of Joe's stock for $$200,000.$ Joe's basls in the $200$ shares redeemed was $$100,000.$

$09/30$: Redeemed $60$ shares of Vinnie's stock for $$60,000.$ His basis in the $60$ shares was $$36,000.$

$12/31$: Pald a distribution of $$10$ per share to each shareholder $($ $$7\mathrm{.}400$ in total$).$

Required:

a$.$ Determine the tax status of each distribution made this year. $($Hint$.$ First, consider If the redemptions are treated as dividend

distributions or exchanges.$)$

b$.$ Compute the corporation's accumulated E&P at January $1$ next year.

c$.$ Joe is considering retirement and would like to have the corporation redeem all of his shares for $$100,000$ plus a $10-$year note with

a fair market value of $$300,000.$

Could Joe still act as a consultant to the company?

Complete this question by entering your answers in the tabs below.

Required A

Determine the tax status of each distribution made this year. $($Hint: First, consider if the redemptions are treated as dividend

distributions or exchanges.$)$Complete this question by entering your answers in the tabs below.

Compute the corporation's accumulated E&P at January $1$ next year:

Note: Round all intermediate calculations to $2$ decimal places except the shares redeemed ratio which should not be rounded.

Accumulated E&P at January $1$ of next year