Kepner Corporation has a deficit in accumulated E & P of $360,000 at beginning of the year. This year they has a taxable income of $274,000. They made a cash distribution to a sole shareholder of $345,000 on Dec 31. The following info might be relevant to determining the tax treatment of the distributions.

• Taxable income included a net operating loss carryover of $12,600.
• Federal income tax liability is $53,600
• Nondeductible fines and kickbacks of $9,800. Also paid nondeductible life insurance premium of $18,400.
• Cash surrender value of the corporate life insurance policies increased by $10,500 during the year.
• The company sold a piece of equipment during the year a reported a Section 1231 gain of $109,000 and recapture income under Section 1245 of $42,000. There were no other Section 1231 transactions during the year, but the corporation did have a capital loss carryforward of $24,700.
• MACRS depreciation exceeds E & P depreciation by $14,300. In addition, an election under Section 179 was made this year for $34,000 of assets.

1. Compute Kepner Corporation's Current E & P for the year before distributions.

2. What is the taxable dividend, return of capital, and capital gain for the sole shareholder after the distributions (his stock basis is $55,000)?