Pink Corporation is a calendar year tax-payer. Pete owns one-third (100 shares) of Pink stock. His basis in the stock is $25,000. Cheryl owns two-thirds (200 shares) of Pink stock. Her basis in the stock is $40,000. On June 10 of the current year, Pink distributes $40,000 to Pete and $80,000 to Cheryl. Determine the tax consequences of the cash distributions to Pete and Cheryl in each of the following independent situations: a. Current​ E&P of $60,000​;
accumulated​ E&P of $100,000.

Pete Cheryl
Distribution:
Dividend income:
Remaining distribution
Return of capital
Capital gain (loss)
Remaining stock basis

b. Current​ E&P of $36,000​;
accumulated​ E&P of $30,000.

Pete Cheryl
Distribution:
Dividend income:
Remaining distribution
Return of capital
Capital gain (loss)
Remaining stock basis