This year LH Company reports a deficit in current E&P of ($720,000) that accrued evenly throughout the year. At the begi

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This Year Lh Company Reports A Deficit In Current E P Of 720 000 That Accrued Evenly Throughout The Year At The Begi 1 (48.32 KiB) Viewed 11 times

This year LH Company reports a deficit in current E&P of ($720,000) that accrued evenly throughout the year. At the beginning of the year, LH's accumulated E&P was $600,000. LH distributed $400,000 to its sole shareholder, Mark, on September 30 of this year. Mark's tax basis in his LH stock before the distribution was $100,000. • How much of the $400,000 distribution is treated as a dividend to Mark? • What is Mark's tax basis in his LH stock after the distribution? • What is LH's balance in accumulated E&P on the first day of next year?