Volunteer Corporation reported taxable income of $430,000 from operations this year. The company paid federal income taxes of $146,200 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The lands fair market value was $124,500 and its tax and E&P basis to Volunteer was $35,000. Rocky assumed a mortgage attached to the land of $24,900. Any gain from the distribution will be taxed at 34 percent. The company had accumulated E&P of $798,000 at the beginning of the year.