1. No E & P adjustment is required for regular tax gains under the installment method.

   		a. true.
   		b. false.

2. When computing E & P, taxable income is not adjusted for 179 expense.

		a. true.
		b. false.

3. A corporate shareholder that receives a constructive dividend cannot apply a dividends received deduction to the distribution.

		a. true.
		b. false.

4. Falcon Corporation ended its first year of operations with taxable income of $250,000. At the time of Falcons formation, it incurred $50,000 of organizational expenses. In calculating its taxable income for the year, Falcon claimed an $8,000 deduction for the organizational expenses. What is Falcons current E & P?

		a. $200,000.
		b. $208,000.
		c. $250,000.
		d. $258,000.
		e. none of the above.

5. Property distributed by a corporation as a dividend is subject to a liability in excess of its basis. For purposes of determining gain on the distribution, the basis of the property is treated as being not less than the amount of liability.

		a. true.
		b. false.