! Required information [The following information applies to the questions displayed below.] Volunteer Corporation reported taxable income of $480,000 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 $88,000 and its tax and E&P basis to Volunteer was $27,500. Rocky assumed a mortgage attached to the land of $17,600. The company had accumulated E&P of $760,000 at the beginning of the year. a. Compute Volunteer's taxable income and federal income tax. Taxable income Federal income tax ! Required information [The following information applies to the questions displayed below.] Flintstone Company is owned equally by Fred and his sister Wilma, each of whom holds 3,200 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 730 of her shares for $33,200 per share on December 31 of this year. Wilma's tax basis in each share is $6,000. Flintstone has current E&P of $10,640,000 and accumulated E&P at the beginning of the year is $50,160,000. a. What are the amount and character (capital gain or dividend) recognized by Wilma because of the stock redemption, assuming only the "substantially disproportionate with respect to the shareholder" test is applied? b. Given your answer to part (a), what is the tax basis in the remaining 2,470 shares Wilma owns in the company? Income tax basis in remaining shares c. By what amount does Flintstone reduce its E&P because of the redemption? Reduction in E&P