Volunteer Corporation reported taxable income of $510,000 from operations this year. The company paid federal income taxes of $173,400 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 $84,500 and its tax and E&P basis to Volunteer was $56,500. Rocky assumed a mortgage attached to the land of $16,900. Any gain from the distribution will be taxed at 34 percent. The company had accumulated E&P of $866,000 at the beginning of the year.

a.

Compute Volunteers total taxable income and federal income tax.

b.

Compute Volunteer's current E&P before the distribution.

c.

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

d.

What amount of dividend income does Rocky report as a result of the distribution?

e.	What is Rockys income tax basis in the land received from Volunteer?