Advanced Taxation Prof Lauricella 2nd Midterm THE EXAM WILL COVER ONLY CHAPTER 7, AND PAGES 20 THROUGH 40 OF CHAPTER 8. 1. Distribution to SHRs is a dividend to extent of current (CEP) or accumulated (AEP) earnings and profits (E&P). 2. Distributions in excess of E&P are return of capital (ROC) until basis is zero, and then capital gain (CG). 3. Example: AEP 100,000, CEP 200,000, A/B of stock 25,000, distribution $330,000. Div 300,000 ROC 25,000 Cap Gain 5,000. 4. If…
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