Lanco Corporation, an accrual-method corporation, reported taxable income of $1,460,000 this year. Included in the computation of taxable income were the following items:

  

• MACRS depreciation of $200,000. Straight-line depreciation would have been $120,000.

  

• A net capital loss carryover of $10,000 from last year.

  

• A net operating loss carryover of $25,000 from last year.

  

• $65,000 capital gain from the distribution of land to the company’s sole shareholder (see below).

  

Not included in the computation of taxable income were the following items:

  

• Tax-exempt income of $5,000. • Life insurance proceeds of $250,000.

  

• Excess current year charitable contribution of $2,500 (to be carried over to next year).

  

• Tax-deferred gain of $20,000 on a like-kind exchange.

  

• Federal income tax refund from last year of $35,000.

  

• Nondeductible life insurance premium of $3,500.

  

• Nondeductible interest expense of $1,000 on a loan used to buy tax-exempt bonds.

  

Lanco paid federal income taxes this year of $496,400. The company’s accumulated E&P at the beginning of the year was $2,400,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt:

  

• June 30: $50,000. 

  

• September 30: Parcel of land with a fair market value of $75,000. Lanco’s tax basis in the land was $10,000. Lug assumed an existing mortgage on the property of $15,000.

  

    Required:  

  

a) Compute Lanco’s current E&P for this year.

  

b) Compute the amount of dividend income reported by Lug Nutt this year as a result of the distributions.

  

c) Compute Lanco’s accumulated E&P at the beginning of next year.