Question - On January 1, Gull Corporation (a calendar year taxpayer) has accumulated E & P of $200,000. During the year 2009, Gull incurs a net loss of $300,000 from operations that accrues ratably. For year 2009, no adjustments are required for computing current E & P. On June 30, 2009, mid-point of the year, Gull distributes $120,000 to Sharon, its sole shareholder, who has a basis in her stock of $75,000.
How much dividend income is recognized by Sharon?
What is the basis in Sharon's stock after the cash distribution?