Comprehensive Problem 18-67 (LO 18-1, LO 18-2, LO 18-3, LO 18-4, LO 18-5) (Static) Lanco Corporation, an accrual-method corporation, reported taxable income of $1,460,000 this year. Included in the computation of taxable income were the following items: . MACRS depreciation of $200,000. Straight-line depreciation would have been $120,000. A net capital loss carryover of $10,000 from last year. A net operating loss carryover of $25,000 from last year. $65,000 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 $5,000. Life insurance proceeds of $250,000. Excess current-year charitable contribution of $2,500 (to be carried over to next year). Tax-deferred gain of $20,000 on a like-kind exchange. Federal income tax refund from last year of $35,000. Nondeductible life insurance premium of $3,500. Nondeductible interest expense of $1,000 on a loan used to buy tax-exempt bonds. Lanco's accumulated E&P at the beginning of the year was $2,400,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt: June 30: $50,000. September 30: Parcel of land with a fair market value of $75,000. Lanco's tax basis in the land was $10,000. Lug assumed an existing mortgage on the property of $15,000. Required. Excess current-year charitable contribution of $2,500 (to be carried over to next year). Tax-deferred gain of $20,000 on a like-kind exchange. Federal income tax refund from last year of $35,000. Nondeductible life insurance premium of $3,500. Nondeductible interest expense of $1,000 on a loan used to buy tax-exempt bonds. Lanco's accumulated E&P at the beginning of the year was $2,400,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt: . June 30: $50,000. September 30: Parcel of land with a fair market value of $75,000. Lanco's tax basis in the land was $10,000. Lug assumed an existing mortgage on the property of $15,000. Required: a. Compute Lanco's current E&P. b. Compute the amount of dividend income reported by Lug Nutt this year as a result of the distributions. c. Compute Lanco's accumulated E&P at the beginning of next year. Answer is complete but not entirely correct. a. Current E&P x $ 1,326,600 $ 110,000 b. Dividend income C. Accumulated E&P, beginning of next year X 3,616,600