[Anonymous]

I am not able to grasp the logic between E&P and taxable income. .

Eg. If we add federal taxes back to Taxable income , why are we reducing it from E& P?

Is it the the same logic between retained earnings and book income ??

Does E& P represent corporation ability to pay shareholder’s dividend. So if we pay federal taxes and receive LIC proceeds . it decrease / increase the E&P respectievely. but have opposite effect on Taxable Income . Am I making sense?

So much information , I am having hard time to retain it !!

Can someone please explain this in simple language?

[nearly_there]

E&P is basically money available for distribution to shareholders. It includes all the non-taxable income (increase) as well as any disallowed losses (decrease). You basially use regular GAAP (or close to it) to calculate E&P not Tax rules.

FAR - 85 November 2011
AUD - 81 January 2012
REG - 68 March 2012
BEC - 86 April 2012
REG - 92 July 2012

[Author]

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