1. This year Sooner Company reports current E&P of negative $300,000. Its accumulated E&P at the beginning of the year was $190,000. Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomers tax basis in his Sooner stock is $75,000. How much of the $400,000 distribution is treated as a dividend to Boomer?

1. Boilermaker, Inc. reported taxable income of $550,000 this year and paid federal income taxes of $115,500. Not included in the companys computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000. Boilermaker deducted depreciation of $100,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $60,000. Compute the companys current E&P.