Sandrine Cloutier owns 15 percent of the 500,000 outstanding shares of Cloutier Ltd. owns 150,000 shares of

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Sandrine Cloutier owns 15 percent of the 500,000 outstanding shares of Cloutier Ltd. owns 150,000 shares of Botan Inc. The Botan Inc. shares were acquired at a cost of $42 per share and have a current fair market value of $51 per share. On June 30, 2020, Cloutier Ltd. declares a non-eligible dividend involving the distribution of all of the Botan shares on a pro rata basis to its existing shareholders. Determine the effect of the payment of this dividend on Cloutier Ltd.’s 2020 Net Income For Tax Purposes. In addition, determine the effect of the payment of this dividend on Sandrine Cloutier’s 2020 Net Income For Tax Purposes and 2020 federal Tax Payable.