illini Corporation reported taxable income of $500,000 from operations for this year. During the year, the company made a distribution of an automobile to its sole shareholder, Carly. The auto's fair market value was $30,000, and its adjusted tax basis to Illini was $0. The auto's E&P adjusted tax basis was $15,000. Illini had accumulated E&P of $1,500,000.

a. Compute Illini's taxable income and federal income tax.

Taxable income is 530,000