Problem 07-45 (LO 07-2) (Algo) Skip to question [The following information applies to the questions displayed below.] Volunteer Corporation reported taxable income of $490,000 from operations this year. During the year, the company made a distribution of land to its sole shareholder, Rocky. The land's fair market value was $120,500 and its tax and E&P basis to Volunteer was $55,500. Rocky assumed a mortgage attached to the land of $24,100. The company had accumulated E&P of $934,000 at the beginning of the year.

a. Compute Volunteer's taxable income and federal income tax.

b. Compute Volunteer's current E&P.

c. Compute Volunteer's accumulated E&P at the beginning of next year.

d. What amount of dividend income does Rocky report because of the distribution?

e. What is Rocky's income tax basis in the land received from Volunteer?