Question: This year, Sooner Company reports a deficit in current E&P of ($488,000). Its accumulated E&P at the beginning of the year was $304,000. Sooner distributed

This year, Sooner Company reports a deficit in current E&P of ($488,000). Its accumulated E&P at the beginning of the year was $304,000. Sooner distributed $608,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomer’s tax basis in his Sooner stock before the distribution is $100,500. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.)

a. How much of the $608,000 distribution is treated as a dividend to Boomer?

b. What is Boomer’s tax basis in his Sooner stock after the distribution?

c. What is Sooner’s balance in accumulated E&P on the first day of next year?

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