Assume a calendar-year corporation has a deficit in current E&P of ($120) and positive accumulated E&P of $120. Under this circumstance, a cash distri
Assume a calendar-year corporation has a deficit in current E&P of ($120) and positive accumulated E&P of $120. Under this circumstance, a cash distribution of $120 to the corporation’s sole shareholder on June 30 will not be treated as a dividend because E&P on December 31 is $0. True or false? Explain.