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Earnings, dividends, redemptions and liquidations

SEE 2 Chapter 8 · IRS outline 1C2, 1C3, 1C5

Walt Brandt takes money out of Copperline Tools in every way you can imagine. A check marked 'dividend'. A company truck he keeps at his cabin. A 'salary' for his brother-in-law, who has never seen the shop. Now he wants to retire, and a buyer wants his shares. Each one of these has a name in the Code and a different tax bill. Theo finds a piece of paper on Walt's desk that says 'E&P?'. It's the right question.

In this chapter

1. Earnings and profits
2. Ordering a distribution: which layer is hit
3. Property distributions and constructive dividends
4. Stock dividends and reporting dividends
5. Stock redemptions
6. Corporate liquidations

This chapter has 6 lessons and 50 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Earnings and profits
• distribution ordering
• property and constructive dividends
• stock dividends
• section 302 redemptions
• sections 331, 332 and 336 liquidations

Chapter 7: The C corporation return · Chapter 9: S corporations: qualifying, electing and terminating