Lanco Corporation, an accrual-method corporation, reported taxable income of $1,620,000 this year. Included in the computation of taxable income were the following items: MACRS depreciation of $265,500. Depreciation for earnings and profits purposes is $183,000. A net capital loss carryover of $15,800 from last year. A net operating loss carryover of $27,500 from last year. $87,950 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 $8,950. Life insurance proceeds of $265,000. Excess current-year charitable contribution of $4,600 (to be carried over to next year). Tax-deferred gain of $22,400 on a like-kind exchange. Nondeductible life insurance premium of $4,900. Nondeductible interest expense of $1,200 on a loan used to buy tax-exempt bonds. Lanco's accumulated E&P at the beginning of the year was $2,910,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi: June 30: $50,500. September 30: Parcel of land with a fair market value of $99,750. Lancos adjusted tax basis in the land was $11,800. Luigi assumed an existing mortgage on the property of $20,600. Required: Compute Lancos current E&P. Compute the amount of dividend income reported by Luigi this year because of the distributions. Compute Lancos accumulated E&P at the beginning of next year.

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