What counts as excess of a corporation’s current and accumulated earnings and profits?

I am looking at line 6 of schedule K from the Form 1120. It says: " did the corporation pay dividends (other than stock dividends and distributions in exchange for stock) in excess of the corporation’s current and accumulated earnings and profits? See sections 301 and 316. If “Yes,” file Form 5452, Corporate Report of Nondividend Distributions. See the instructions for Form 5452."

If my corporation made a payment that returned all of an original investment amount plus net income/profit to the corporation's founder, would this count as excess of E&P?

316

Not applicable

Jun 30, 2020 12:24:55 AM

yes you did. form 5452 is to report dividend distributions that are not taxable. if all earnings & profits are distributed then any more would be non-taxable distributions. that's distributions in excess of E&P. all dividend distributions are supposed to be reported on form 1099-div the non-taxable portion in box 3

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What counts as excess of a corporation’s current and accumulated earnings and profits?