Question: Parking Space Inc. distributed $18,000 to Speedways Inc., a 15 percent shareholder. Parking Space's E&P applicable to Speedways' distribution is $5,000 and Speedways had a basis in its stock of $7,000.
1) How much dividend income does Speedways have?
2) How much and what kind of taxable income does Speedways have because of the distribution?
3) What is Speedways's basis in its stock immediately after the distribution?