Lanco Corporation, an accrual-method corporation, reported taxable income of $1,790,000 this year. Included in the computation of taxable income were the following items: MACRS depreciation of $227,000. Depreciation for earnings and profits purposes $127,000. A net capital loss carryover of $20,700 from last year. A net operating loss carryover of $29,900 from last year. $77,850 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 $8,450. Life insurance proceeds of $261,000. Excess current year charitable contribution of $2,900 (to be carried over to next year). Tax-deferred gain of $26,400 on a like-kind exchange. Nondeductible life insurance premium of $3,300. Nondeductible interest expense of $3,300 on a loan used to buy tax-exempt bonds. Lanco paid federal income taxes this year of $375,900. The company's accumulated E&P at the beginning of the year was $2,850,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt: June 30: $91,000. September 30: Parcel of land with a fair market value of $89,250. Lanco's tax basis in the land was $11,400. Lug assumed an existing mortgage on the property of $19,100. 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. Complete this question by entering your answers in the tabs below. Req A Reg B Reqc Compute Lanco's current E&P for this year. Current E&P ReqA ReqB > Lanco Corporation, an accrual-method corporation, reported taxable income of $1,790,000 this year. Included in the computation of taxable income were the following items: MACRS depreciation of $227,000. Depreciation for earnings and profits purposes $127,000. A net capital loss carryover of $20,700 from last year. A net operating loss carryover of $29,900 from last year. $77,850 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 $8,450. Life insurance proceeds of $261,000. Excess current year charitable contribution of $2,900 (to be carried over to next year). Tax-deferred gain of $26,400 on a like-kind exchange. Nondeductible life insurance premium of $3,300. Nondeductible interest expense of $3,300 on a loan used to buy tax-exempt bonds. Lanco paid federal income taxes this year of $375,900. The company's accumulated E&P at the beginning of the year was $2,850,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt: June 30: $91,000. September 30: Parcel of land with a fair market value of $89,250. Lanco's tax basis in the land was $11,400. Lug assumed an existing mortgage on the property of $19,100. 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. Complete this question by entering your answers in the tabs below. Req A Reg B Reqc Compute Lanco's current E&P for this year. Current E&P ReqA ReqB >
