5. X Co. has the following items of possible tax significance in 2006. Determine its current earnings and profits for 2006. book pre-tax income of 1,000,000. book tax expense of 340,000. taxable income of 400,000. federal taxes of 125,000. interest from municipal bonds of 100,000. premiums for officer's term life insurance of 25,000 (X is the beneficiary). X was allowed depreciation of 40,000 on an apartment building acquired in 1998. The building's original cost was 1,000,000. X exchanged land used in its business for another parcel of land also to be used in X's business. The land had a FMV of 1,000,000 and a basis of 500,000. X was able to currently utilize a net operating loss carryover of 100,000.