Computing Corporate Earnings and Profits for Tax Purposes

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This course covers the Why, When, and How of computing Earnings & Profits (E&P).

This course covers the Why, When, and How of computing Earnings & Profits (E&P) for Tax Purposes.

1. Why?  Distributions to shareholders are taxable to the extent of corporate E&P.

2. When?  Ideally, a corporation should compute its E&P annually.

   1. Presumption that distributions are taxable dividends can only be refuted through a computation of E&P.

3. How?  There is no set formula for computing E&P, thus this course provides much needed insight into that process.

   1. Worksheet for computing current E&P is included in the instructions to form 5452.

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