Gold Corporation has an accumulated E P of 50000 on Jan 1st

Gold Corporation has an accumulated E &P of $50,000 on Jan 1st 2018, Gold has a current E&P of $80,000 before any adjustments or distributions. They had a federal income tax refund of $5,000 and 50% of the meals and entertainment deduction is $8,000. Federal income taxes paid were $12,000 and there was a charitable contribution carryover of $1,000. On December 31, 2018, the corporation distributes $130,000 to its sole shareholder, Blew, an individual. Gold Corporation\'s E &P as of Jan. 1, 2019 is:

Solution

Beginning basis $50,000 Add: current E & P 80000 Federal income tax refund 5000 Less: Meal and entertainment deduction -8000 Less: chartiable conttriution carryover -1000 less: distribution -130000 E & P as on Jan 1 2019 ($4,000) If any doubt please comment