Lanco Corporation, an accrual-method corporation, reported taxable income of $1,530,000 this year. Included in the computation of taxable income were the following items:

• MACRS depreciation of $230,500. Depreciation for earnings and profits purposes is $128,000.
• A net capital loss carryover of $20,500 from last year.
• A net operating loss carryover of $27,000 from last year.
• $63,850 capital gain from the distribution of land to the companys sole shareholder (see below).

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

• Tax-exempt income of $6,700.
• Life insurance proceeds of $276,000.
• Excess current-year charitable contribution of $2,400 (to be carried over to next year).
• Tax-deferred gain of $23,300 on a like-kind exchange.
• Nondeductible life insurance premium of $3,900.
• Nondeductible interest expense of $2,700 on a loan used to buy tax-exempt bonds.

Lanco's accumulated E&P at the beginning of the year was $3,090,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt:

• June 30: $86,000.
• September 30: Parcel of land with a fair market value of $78,750. Lancos adjusted tax basis in the land was $14,900. Lug assumed an existing mortgage on the property of $23,400.

Required:

1. Compute Lancos current E&P before the distributions.
2. Compute the amount of dividend income reported by Lug Nutt this year as a result of the distributions.
3. Compute Lancos accumulated E&P at the beginning of next year.

a. Current E&P
b. Dividend Income
c. Accumulated E&P, beginning of next year