Comprehensive Problem 18-69 (LO 18-1, LO 18-2, LO 18-3, LO 18-4, LO 18-5) (Algo) Lanco Corporation, an accrual-method corporation, reported taxable income of $1,800,000 this year. Included in the computation of taxable income were the following items: MACRS depreciation of $231,500. Depreciation for earnings and profits purposes is $142,000. A net capital loss carryover of $20,900 from last year. A net operating loss carryover of $27,900 from last year. $77,800 capital gain from the distribution of land to the companys sole shareholder (see below). Not included in the computation of taxable income were the following items: Tax-exempt income of $7,800. Life insurance proceeds of $307,000. Excess current-year charitable contribution of $3,600 (to be carried over to next year). Tax-deferred gain of $24,100 on a like-kind exchange. Nondeductible life insurance premium of $5,200. Nondeductible interest expense of $3,600 on a loan used to buy tax-exempt bonds. Lanco's accumulated E&P at the beginning of the year was $2,570,000. During the year, Lanco made the following distributions to its sole shareholder, Luigi (Lug) Nutt: June 30: $55,500. September 30: Parcel of land with a fair market value of $92,500. Lancos adjusted tax basis in the land was $14,700. Lug assumed an existing mortgage on the property of $18,100. Required: Compute Lancos current E&P before the distributions. Compute the amount of dividend income reported by Lug Nutt this year as a result of the distributions. Compute Lancos accumulated E&P at the beginning of next year.

Required: a. Compute Lanco's current E\&P before the distributions. 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