Earnings & profits (E&P) is the measure of a corporation’s economic ability to pay dividends to its shareholders. An up-to-date E&P calculation is important for many corporate transactions, including determining whether a distribution to shareholders is a taxable dividend.

A computation of earnings and profits for the tax year (see the example of a filled-in worksheet and a blank worksheet below). If the corporation was required to complete Schedule M-1 (Form 1120) or Schedule M-3 (Form 1120) for the tax year, also attach.

For more information about figuring earnings and profits, see the Worksheet for Figuring Current Year Earnings and Profits in the Form 5452 instructions. .

Ever wondered what earnings and profits are? And how to properly calculate them? Here's Leo Berwick's lesson on how to calculate earnings and profits.

This template calculates current and accumulated E&P, the amount of the dividends paid from E&P, and any dividend paid in excess of E&P. E&P determines the maximum amount that must be recognized as dividends if distributed to shareholders [IRC Sec. 316 (a)]. See PPC’s 1120 Deskbook, Key Issue 25D.

The primary purpose of this Earnings and Profits Computation Practice Aid (Practice Aid) is to assist practitioners in performing earnings and profits computations.

This template calculates stock basis, the accumulated adjustments account (AAA), the other adjustments account (OAA), previously taxed income (PTI), retained earnings (RE), and accumulated earnings and profits (AE&P).

Earnings and Profits (E&P) This template calculates current and accumulated E&P, the amount of the dividends paid from E&P, and any dividend paid in excess of E&P. E&P determines the maximum amount that must be recognized as dividends if distributed to …

follows the federal adjustments to arrive at earnings and profits: • Add nontaxable income (e.g., Intercompany dividends) • Add artificially created deductions (e.g., dividend received deductions)

Post-1986 Earnings and Profits (Post-1986 E&P). Post-1986 E&P is the E&P of the foreign corporation, including previously taxed E&P, accumulated in taxable years beginning after December 31, 1986, during periods when the foreign corporation was a specified foreign cor-poration. It is calculated without any reduction