Badger corporation was incorporated in the current year. it reports an $8,000 nol on its initial tax return. badger distributed $2,500 to its shareholders. is it possible for this distribution to be taxed as a dividend to badger's shareholders? explain. a.yes. the taxable loss must first be adjusted to compute current e& p which would need to be at least $2,500 for this to be considered to be a dividend. b.yes. the taxable loss must first be adjusted to compute current e& p which would need to be at least $10,500 for this to be considered to be a dividend. c.no. the taxable loss of $8,000 exceeds the distribution amount of $2,500, so the distribution would be a return of capital. d.no. the taxable loss must first be adjusted to include accumulated e& p. the adjustment needs to be at least $8,000 to avoid a taxable loss but would still be deemed a return of capital.