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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. 

Learning Objectives

  • Explore why it is important to compute Earnings and Profits (E&P).
  • Discover how distributions from a corporation to its shareholders are taxed.
  • Recognize the difference between taxable income and current E&P, and explore a case study that compares taxable income and Book Income with E&P.
  • Discover how to compute current E&P
  • Recognize the importance of differentiating between Current and Accumulated Earnings and Profits.
Last updated/reviewed: March 15, 2019

Prerequisites

Course Complexity: Advanced

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION and OVERVIEW
  3:34Introduction to Computing Corporate Earnings and Profits After 2017
  5:06Importance of Computing E&P
  5:02Corporate Distrubutions
  17:00Computing E&P
  10:19Depreciation Example
  5:08Reporting Requirements
  6:37Case Study
  13:00Taxation of Distributions to Shareholders
  7:45What is the Taxable Dividend?
CONCLUSION
  2:5010 Conclusion
Continuous Play
  1:16:20Computing Corporate Earnings and Profits After 2017 Full Video
SUPPORTING MATERIALS
  PDFSlides: Computing Corporate Earnings and Profits After 2017
  PDFComputing Corporate Earnings and Profits After 2017 Glossary/Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM