Question
Required information [The following information applies to the questions displayed below.] Volunteer Corporation reported taxable income of $525,000 from operations this year. During the year,
Required information [The following information applies to the questions displayed below.]
Volunteer Corporation reported taxable income of $525,000 from operations this year. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The lands fair market value was $89,000 and its tax and E&P basis to Volunteer was $29,500. Rocky assumed a mortgage attached to the land of $17,800. Any gain from the distribution will be taxed at 21 percent. The company had accumulated E&P of $944,000 at the beginning of the year.
a. Compute Volunteers total taxable income and federal income tax.
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