Which of the following statements best describes the role of current and accumulated E&P in determining if a distribution is a dividend?
A. A distribution will only be a dividend if total E&P (current plus accumulated) is positive at the time of the distribution.
B. At a minimum, some portion of the distribution will be a dividend if current E&P for the year is positive, even if accumulated E&P is negative.
C. A distribution can never be a dividend if current E&P is negative.
D. A distribution will never be a dividend if current E&P for the year is negative, even if accumulated E&P is positive.
Answer: B
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