Lanco Corporation, an accrual-method corporation, reported taxable income of $2,200,000 this year. Included in the computation of taxable income were the following items: ch 7

• MACRS depreciation of $266,500. Depreciation for earnings and profits purposes is $151,000.
• A net capital loss carryover of $12,300 from last year.
• A net operating loss carryover of $32,800 from last year.
• $70,950 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 $5,750.
• Life insurance proceeds of $296,000.
• Excess current-year charitable contribution of $4,900 (to be carried over to next year).
• Tax-deferred gain of $20,800 on a like-kind exchange.
• Nondeductible life insurance premium of $6,400.
• Nondeductible interest expense of $3,300 on a loan used to buy tax-exempt bonds.

Lanco's accumulated E&P at the beginning of the year was $2,980,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi:

• June 30: $73,000.
• September 30: Parcel of land with a fair market value of $86,750. Lancos adjusted tax basis in the land was $15,800. Luigi assumed an existing mortgage on the property of $20,600.

Required:

1. Compute Lancos current E&P.
2. Compute the amount of dividend income reported by Luigi this year because of the distributions.
3. Compute Lancos accumulated E&P at the beginning of next year.