Lanco Corporation, an accrual-method corporation, reported taxable

income of $1,930,000 this year. Included in the computation of taxable income were the following items:

-MACRS depreciation of $325,000. Straight-line depreciation would have been $219,000.
-A net capital loss carryover of $13,600 from last year.
-A net operating loss carryover of $31,400 from last year.
-$83,550 capital gain from the distribution of land to the company’s sole shareholder (see below).Not included in the computation of taxable income were the following items:

-Tax-exempt income of $6,850.
-Life insurance proceeds of $279,000.
-Excess current-year charitable contribution of $5,400 (to be carried over to next year).
-Tax-deferred gain of $21,700 on a like-kind exchange.
-Federal income tax refund from last year of $41,100.
-Nondeductible life insurance premium of $5,900.
-Nondeductible interest expense of $3,900 on a loan used to buy tax-exempt bonds.Lanco’s accumulated E&P at the beginning of the year was $2,950,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt:

-June 30: $80,500.
-September 30: Parcel of land with a fair market value of $93,750. Lanco’s tax basis in the land was $10,200. Lug assumed an existing mortgage on the property of $16,200.Required:

-Compute Lanco’s current E&P.
-Compute the amount of dividend income reported by Lug Nutt this year as a result of the distributions.
-Compute Lanco’s accumulated E&P at the beginning of next year.

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