A Calendar-Year Corporation Has Deficit in Current E&P of ($500)and

Multiple Choice

A calendar-year corporation has deficit in current E&P of ($500) and positive accumulated E&P of $1,000. The corporation makes a $600 distribution to its sole shareholder. Which of the following statements is true?

A) $500 of the distribution will be a dividend because total E&P is $500.
B) $0 of the distribution will be a dividend because current E&P is a deficit.
C) $600 of the distribution will be a dividend because accumulated E&P is $1,000.
D) Up to $600 of the distribution could be a dividend depending on net E&P (current plus accumulated E&P) on the date of the distribution.