Ridge Corp., a calendar year C corporation, made a non-liquidating cash distribution to its shareholders of $
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Ridge Corp., a calendar year C corporation, made a non-liquidating cash distribution to its shareholders of $ 1,000,000 with respect to its stock. At that time, Ridge’s current and accumulated earnings and profits totaled $750,000 and its total paid-in capital for tax purposes was $10,000,000. Ridge had no corporate shareholders. Ridge's cash distribution:
I. Was taxable as $750,000 in dividend income to its shareholders.
II. Reduced its shareholders' adjusted bases in Ridge stock by $250,000.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For 
South-Western Federal Taxation 2019 Comprehensive
ISBN: 9781337703017
42th Edition
Authors: David M. Maloney, William A. Raabe, William H. Hoffman, James C. Young
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