Distributions from corporations to the shareholders in a nonliquidating distribution will usually be classified as a dividend up to the amount of the corporation's earnings and profits. retained earnings. taxable income for the year. stock basis. 6. Bill and Hillary, husband and wife, file separate returns.
Bill and Hillary live in a community property state that considers separate property income to be community income. Bill's salary is $82,000 and Hillary's salary is $80,000. Hillary receives dividend income of $7,000 from stock inherited from her parents. Bill receives interest income of $5,000 from bonds purchased with his salary after marriage. Bill and Hillary receive $10,000 dividend income from stock they purchased jointly. Bill's income would be $92,000. $93,000. $94,500. $97,000.