Comprehensive Problem 7-65 (LO 7-1, LO 7-2, LO 7-3, LO 7-4, LO 7-5) Lance 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 Anet capital loss carryover of $10.000 from last year . Anet 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 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 Current E&P Dividend income Accumulated E&P beginning of next year