Description
This course covers the Why, When, and How of computing Earnings and Profits (E&P).
- Why? Distributions to shareholders are taxable to the extent of corporate E&P.
- When? Ideally, a corporation should compute its E&P annually.
- Presumption that distributions are taxable dividends can only be refuted through a computation of E&P.
- How? There is no set formula for computing E&P.
- Worksheet for computing current E&P included in the instructions to form 5452.
