Question: Green Corporation (a calendar year taxpayer) had a deficit in accumulated E & P of $250,000 at the beginning of the current year. Its net profit for the peroid January 1 through July was $300,000, but its E & P for the entire taxable year was only $40,000. If Green made a distribution of $60,000 to its sole shareholder on August 1, how will the shareholder be taxed?