Volunteer Corporation reported taxable income of $485,000 from operations this year. The company paid federal income taxes of $101,850 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 $107,500 and its tax and E&P basis to Volunteer was $34,500. Rocky assumed a mortgage attached to the land of $21,500. The company had accumulated E&P of $936,000 at the beginning of the year.

a. Compute Volunteers taxable income and federal income tax.