Question: I need help on this problem, could you please show all work so I can learn! At the beginning of 2017, Annabelle Corporation has a

I need help on this problem, could you please show all work so I can learn!

At the beginning of 2017, Annabelle Corporation has a deficit in earnings and profits (E&P) of $30,000. Annabelle Corporation has current earnings and profits in 2017 of $100,000.

On December 31, 2017, Annabelle Corporation distributes property to its sole shareholder, Molly. The property has a fair market value of $125,000 and a basis in the hands of Annabelle Corporation of $115,000

The corporate tax rate is 40%

Molly has a tax basis in her Annabelle Corporation stock of $10,000

1. How much taxable income will Molly report in 2017?

2. What type of income is it?

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