Volunteer Corporation has a current E&P of $395,000 before considering the effect of any distributions. The company had accumulated E&P of $750,000 at the beginning of the year. During the year, the company made a distribution of land to its sole shareholder. The lands fair market value was $75,000 and its tax and E&P basis to Volunteer was $25,000. Rocky assumed a mortgage attached to the land of $15,000. Any gain from the distribution will be taxed at 21 percent.

(a) Compute Volunteers accumulated E&P at the beginning of the next year.

(b) what amount of dividend income the shareholder report as a result of the distribution?

(c) What is the shareholders basis in the land received?