Solved: What is tax basis in austin stock after distribution, Financial Accounting

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What is tax basis in austin stock after distribution

Response to the following problem:

Austin Company reports positive current E&P of $200,000 and negative accumulated E&P of $300,000. Austin distributed $250,000 to its sole shareholder, Betsy Bevo, on December 31, 20X3. Betsys tax basis in her stock is $125,000. How much of the $250,000 distribution is treated as a dividend to Betsy and what is her tax basis in Austin stock after the distribution?

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Financial Accounting: What is tax basis in austin stock after distribution

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