McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 60

True or False.A calendar-year corporation has positive current E P of $100 and accumulated negative E P of $200.A cash distribution of $100 to the corporation's sole shareholder at year-end will not be treated as a dividend because total E P is negative $100.Explain.