Lance Company, an accrual basis corporation, reported taxable income of $1,560,000
for 2013. Included in the computation were the following:
MACRS depreciation of $200,000, S/L would have bee $120,000
Net Capital loss carryover of $10,000 from 2012
Net Operating Loss carryover of $25,000 from 2012
Not Included were the following:
Tax Exempt income of $5,000
Life insurance proceeds of $250,000
Excess charitable contributions of $2,500 to be carryover to 2013
Tax-Deferred gain of $20,000 on a like kind exchange
Federal income tax refund from 2012 of $30,000
Nondeductible insurance premiums of $3,500
Lance Company paid federal income taxes of $496,500. The company's Accumulated E&P on
January 1 was $2,400,000.
During the year they distribute 50,000 on June 30 and $75,000 on December 31 to the sole
Shareholder Nick.
A. Compute Lance's current E&P for 2013 (4 points)
B. Compute the amount of Dividend Income reported by Nick in 2013. (4 points)
C. Compute Lance's Accumulated E&P at the beginning of 2014. (4 points)