Corporation Y had taxable income of 100,000 in 2021 and paid 20,000 of federal income tax. In calculating its taxable income, Corporation Y did not include 10,000 of tax exempt interest income and did not deduct a penalty of 20,000. Corporation Y did not deduct a reserve for an environmental clean-up of 25,000 that was recorded on its books, because the liability isn't deductible until it is paid. Calculate Y's E&P for 2021. Explain your Answer.

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To calculate Corporation Ys EP Earnings and Profits for 2021 we start with its taxable income and ma... View the full answer