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Discussion:C-Corp Dividends

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Discussion Forum Index --> Accounting Questions --> C-Corp Dividends

Gp (talk|edits) said:

19 August 2013
My Question pertains to a C-Corp: Prepaing Interim F.S for bonding company and wants to show dividend based upon earning thru 6/30. Currently has sufficient earnings and R/E as of 6/30 to declasre and pay dividend. My question is if it is ok to declare dividends based upon earnings @ 6/30. My concern is in the last half of the year, has a loss, there will not be sufficient Earnings & Profits to cover the dividend. Is this a valid concern, or is the fact that as of 6/30 there was sufficient E&P based upon activity through 6/30 sufficient or does it matter how Y/E numbers will fall?

Any thoughts or references would be appreciated.

Podolin (talk|edits) said:

19 August 2013
Question a bit unclear. Is this a corporate law question or an accounting question? Board decides whether and when to declare and pay divs. Tax rules also enter into it; e.g., book/tax differences could matter.

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