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sdas [7]
3 years ago
14

Hoosier Corporation declared a 2-for-1 stock split to all shareholders of record on March 25 of this year. Hoosier reported curr

ent E&P of $600,000 and accumulated E&P of $3,000,000. The total fair market value of the stock distributed was $1,500,000. Barbara Bloomington owned 1,000 shares of Hoosier stock with a tax basis of $100 per share. How does stock devidend effect Hoosier's accumulated E&P at the beginning of 2010?
Business
1 answer:
BaLLatris [955]3 years ago
6 0

Answer:

Hoosier does not adjust its E&P for the stock dividend because it is not taxable to the shareholders.

Explanation:

Hoosier does not adjust its E&P for the stock dividend because it is not taxable to the shareholders. This conclusion is based on the definition of taxable dividends.

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