It would be great if you can advise me to approach the below question.. A suggestion of how to approach would help as I cannot expect the answer.
A corporation has E&P of $200,000. It's accumulated E&P as of January 2012 was $300,000. It made quarterly cash distributions of $160,000 to its shareholders during 2012. What are the tax consequences to A,B,C and D in this situation -
A owns 80% of the company's stock and basis is 80,000. B owns 20% of company's stock and basis is $20,000. After receiving the second quarterly distribution, A sells one-half of stock to C for $500,000. Thereafter A sells remaining stock to D for $530,000 after receiving the third quarterly distribution.