Spieth Corporation reported taxable income of $500,000 from operations this year. The company paid federal income taxes

Question:

Spieth Corporation reported taxable income of $500,000 from operations this year. The company paid federal income taxes of $105,000 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Jordan Day. The land’s fair market value was $75,000 and its tax and E&P basis to Spieth was $125,000. Jordan assumed a mortgage attached to the land of $15,000. The company had accumulated E&P of $750,000 at the
beginning of the year.

a. Compute Spieth’s total taxable income and federal income tax.
b. Compute Spieth’s current E&P.
c. Compute Spieth’s accumulated E&P at the beginning of next year.
d. What amount of dividend income does Jordan report as a result of the distribution?
e. What is Jordan’s tax basis in the land he received from Spieth?

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