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Business, 08.07.2021 16:00 officialrogerfp3gf2s

Aaron and Michele, equal shareholders in Cavalier Corporation, receive $25,000 each in distributions on December 31 of the current year. During the current year, Cavalier sold an appreciated asset for $60,000 (basis of $15,000). Payment for the sale of the asset will be made as follows: 50% next year and 50% in the following year with interest payable at a rate of 6 percent. Before considering the effect of the asset sale, Cavalier's current-year E & P is $40,000 and it has no accumulated E & P. Required:
How much of Aaron’s distribution will be taxed as a dividend?

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Aaron and Michele, equal shareholders in Cavalier Corporation, receive $25,000 each in distributions...
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