Current Earnings and Profits

Current Earnings and Profits means:
a figure arrived at by adding nontaxable or tax- exempt income to taxable income for the tax year. Current earnings and profits, if not paid out, become accumulated earnings and profits. A distribution comes first from current earnings and profits and then from accumulated earnings and profits and is taxable to the shareholder to the extent of current and accumulated earnings and profit. A distribution is taxable to the extent of current earnings and profits even if accumulated earnings and profits are negative.

See also other Tax Terms and Definitions in U.S.A.

Former IRC (check if this IRC provision is current here) §312.